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Blossom Joseph et al., et al v. American Modification

August 16, 2012


The opinion of the court was delivered by: J. Paul Oetken, District Judge:


Plaintiffs, individually and on behalf of others similarly situated, brought this action on behalf of homeowners-mortgagors who hired American Modification Agency, Inc.; Amerimod, Inc.; Island Pride Home, Inc.; Salvatore Pane, Jr.; Russell Izzo; Calvin Gordon; and James F. Anzelone ("Defendants") to stop foreclosures and obtain favorable mortgage modifications. Plaintiffs assert that, instead, Defendants unlawfully required Plaintiffs to pay an upfront fee of 1% of the total amount of their existing mortgage as a condition of receiving the promised services, which in many cases were never rendered. This matter was certified as a class action on May 10, 2012.

Plaintiffs now move to voluntarily dismiss this matter pursuant to Federal Rule of Civil Procedure 23(e). For the reasons discussed below, Plaintiffs' motion is granted.


Jurisdiction over this matter is based on the Class Action Fairness Act of 2005, Pub.L. No. 109-2, § 5, 119 Stat. 4 (2005). See 28 U.S.C. § 1332(d).

A. The pleadings

Plaintiffs initiated the action on December 23, 2008, and filed an amended complaint on July 8, 2009. (Dkt. Nos. 1, 14.) The five named Plaintiffs (Blosson Joseph, Francis Joseph, Paul Eliacin, Dawn Yamada, and George Yamada) assert for themselves, and others similarly situated, claims for breach of contract, common law fraud, unjust enrichment, and violations of the Credit Repair Organization Act, the New York Consumer Fraud Statute, the New Jersey Fraud Statute, and other state statutes.

The Defendants have appeared in this action inconsistently. Five Defendants -- Calvin Gordon; Amerimod, Inc.; American Modification Agency, Inc.; Island Pride Homes Inc.; and Salvatore Pane, Jr. ("Amerimod Defendants") -- filed their answer to the amended complaint on August 6, 2009.*fn1 (Dkt. No. 19.) Subsequently, on October 7, 2009, Attorney Hyman Hacker from Albanese & Albanese LLP moved to withdraw as counsel to the Amerimod Defendants based on their failure to communicate or to comply with discovery demands or to pay Mr. Hacker's attorney's fees. (Dkt. No. 29.) The Court granted Mr. Hacker's motion to withdraw on October 29, 2009. (Dkt. No. 30.)

The sixth Defendant, Mr. Russell Izzo, filed an answer to the amended complaint and cross-claims against the Amerimod Defendants on September 8, 2009.*fn2 (Dkt. No. 22.) Recently, Mr. Izzo's counsel informed the Court that he has been discharged from representing Mr. Izzo, but he has not moved the Court for leave to withdraw and appeared at the February 2, 2012 conference as a courtesy to his former client. (See Greene Decl. ¶ 9.)

B. New York Attorney General's Proceeding

On or around August 13, 2009, the Attorney General of the State of New York commenced a special proceeding in New York Supreme Court, New York County, against three of the defendants in the instant proceeding, Amerimod, AMA, and Pane (the "State Defendants") based on the same events. People of the State of New York v. Amerimod Inc., The American Modification Agency, Inc., and Salvatore Pane, Jr., Individually and as Principal Of Amerimod Inc., and The American Modification Agency Inc., Index No. 402032/2009 (N.Y. Sup. Ct.) (the "NYAG Proceeding"). In connection with the NYAG Proceeding, the New York Supreme Court issued a temporary restraining order freezing the bank accounts of the State Defendants. (Greene Decl. ¶ 5.) Thereafter, Amerimod and AMA, the primary defendants in this action, ceased all operations and vacated their corporate offices. (Id.)

Plaintiffs in the instant action moved to intervene in the NYAG Proceeding in October 2010. New York Supreme Court Justice Emily Jane Goodman denied the motion to intervene on May 2, 2011, holding that the class interests were adequately represented by the New York Attorney General. (May 2, 2011 Order, Ex. C to Greene Decl.)

C. Class Certification

In December 2009, Plaintiffs moved for class certification pursuant to Fed. R. Civ. P. 23(a) and 23(b)(3). (Dkt. No. 34.) Only Defendant Izzo filed an opposition to this motion. (Dkt. No. 36.) On May 10, 2010, Judge Stephen C. Robinson, to whom this case was previously assigned, granted Plaintiffs' motion for class certification and created two classes: (1) one for plaintiffs who are eligible for relief under a state mortgage foreclosure consultant law that prohibits the collection of upfront fees; and (2) another for plaintiffs seeking relief under state common law. (Dkt. No. 43.) On November 12, 2010, the case was reassigned to Judge Robert W. Sweet. On September 30, 2011, the case was reassigned to the undersigned. (Dkt. No. 46.) Even though the class was certified, Plaintiffs have not disseminated notice of the certified class action to the class as required by Fed. R. Civ. P. 23(c). (Greene Decl. ΒΆ 8.) Nevertheless, Plaintiffs' counsel declares that seventeen individual class members initiated contact with Plaintiffs' counsel after learning about the ...

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