Daniel A. Frischberg, Esq. N.J. Attorney ID. No. 033892007 The Law Of?ce of Andrew B. Finberg, LLC 525 Route 73 South, Suite 200 Marlton, New Jersey 08053 (856) 273?6979 Attorney for Defendant, Carolyn Rabchuk NATIONAL COLLEGIATE STUDENT LOAN TRUST 2006-2, A Delaware Statutory Trust, by and through, US. Bank National Association, as Trustee Plaintiff, vs. JAMES L. COWLES and CAROLYN RABCHUK, INDIVIDUALLY AND OIN TLY Defendants. SUPERIOR COURT OF NEW JERSEY LAW DIVISION ATLANTIC COUNTY Docket No.: L?l 826-1 5 Civil Action ORDER TO CONSOLIDATE AND DISMISS CASES WITHOUT PREJUDICE This matter having been opened to the Court upon the application of Daniel A. Frischberg, Esq. attorney for Defendant, Carolyn Rabchuk, for an Order Consolidating Cases and Dismissing without prejudice, and the Court having read the moving papers, and any papers ?led in opposition thereto, and for good cause shown; IT IS on this g?y of Gt} ORDERED that: 2015an?hnn W. 2. The Complaints be dismissed without prejudice; and 3. A copy of this Order shall be served upon all parties within 7 days from receipt by Defendants attorney. J.S.C. JAMES P. SAVIO, J.S.C. ?Opposed __Un0pposed ?ma 5 5mg Ea az i: 3,NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE JAMES P. SAVIO, J.S.C. CASE: DOCKET DATE: MOTION: MOVANT: PAPERS RE WE WED: COMMITTEE ON OPINIONS 1201 Bacharach Boulevard Atlantic City, NJ 08401-4527 (609) 594-3415 MEMORANDUM OF DECISION PURSUANT TO RULE National Collegiate Student Loan Trust 2006-2, A Delaware Statutory Trust, by and through, U.S. Bank National Association, as Trustee v. Cowles, et als. ATL-L-1826-15 October 27, 2015 Motion to Consolidate Cases and Dismiss Complaint Without Prejudice for Failure to State a Claim Pursuant to Rule Daniel A. Frishberg, Esquire Defendant -?Carolyn Rabchuk Kortney Swanson Davis, Esquire Plaintiff National Collegiate Student Loan Trust Notice of Motion, Certi?cation of Counsel, Opposition papers dated October 8, 2015, Exhibits, Reply Letter Brief dated October 13, 2015 Nature of Motion and Procedural Background Defendant, Carolyn Rabchuck, makes this application to consolidate and On August 10, 2015, plaintiff ?led suit against the defendant and the suit was assigned docket In the suit, plaintiff sought a judgment against the defendant on account of an alleged default in an obligation to pay a student loan. On August 10, 2015, plaintiff also ?led suit against defendants in the Law Division captioned ?National Collegiate Student Loan Trust 2005-3, a Delaware Statutory Trust, by and through, U.S. Bank National G) ?The Judiciary of New Jersey is an equal Opportunity/Affirmative Action Employer? Association, as Trustee V. James L. Cowles and Carolyn Rabchuk, individually and iointly, regarding an alleged student loan, this second suit was ?led under docket number 15. These applications were ?led by the defendant on September 30, 2015. Counsel certi?es that the above Complaints are similar or identical in their allegations, and that all of the above matters involve a common question of law or fact arising out of the same series of transactions. Accordingly, counsel seeks to consolidate and Additionally, counsel seeks to dismiss said dockets pursuant to to 23 as counsel alleges that plaintiff is not in compliance with the Corporations Business Entity Reporting Act. This argument Will be discussed further in the discussion section of this memorandum. Both of defendants? request are opposed by plaintiff. Neither plaintiff nor defendant have requested oral argument. Discussion Dismiss All Complaints for Failure to State a Claim Pursuant to Rule 4:18- 2, and N.J.S.A. to 23. In support of this argument, defense counsel alleges that the plaintiff violated the Corporation Business Activities Reporting Act (?the Reporting Act?), to 23. Counsel states that plaintiff violated the reporting act by failing to ?le a Notice of Business Activities Report (?Activities Report?) required by N.J.S.A. 14A: 1 3?1 5. Counsel alleges that failure to ?le a timely Activities Report bars a foreign Corporation from maintaining any action or enforcing any proceeding in any state or federal court in New Jersey. Furthermore, counsel asserts that pursuant to Delaware Law, National Collegiate Student Loan Trust, A Delaware Statutory Trust, is a business entity which has to be registered with the Delaware Division of Corporation. As such, it would follow, counsel asserts that plaintiff should also have to ?le in the state of New Jersey, in which it conducts business. In support of this argument, counsel cites N.J.S.A. 14Azl3-15, and argues that every foreign corporation subject to the Reporting Act must ?le an Activities Report with the Director of the Division of Taxation of the State of New Jersey. The Activities Report is to be ?led on or before the ?fteenth day of the fourth month after the close of the corporation?s calendar or ?scal accounting year. However, counsel points out that there is an exception. Pursuant to 14A213?l6 a foreign corporation is not required to ?le, if it has received either a certi?cate of authority to do business in this state or has ?led a timely tax return under the Corporation Business Tax Act, N.J.S.A. 54:10A?l to 40, or the Corporation Income Tax Act, to 24. In this case, defendant alleges that plaintiff violated the Reporting Act by failing to ?le an Activities Report, as required by N.J.S.A. 14A: Counsel contends that this plaintiff is a sophisticated business enity. The plaintiff regularly engages in activities through the maintenance of personnel in this state, namely the use of attorneys to prosecute said 740 Complaints. Additionally, upon information and belief, counsel states that plaintiff receives payments of at least $25,000.00 from New Jersey sources, requiring the plaintiff to ?le an Activities Report. Furthermore, upon information and belief, counsel asserts that the plaintiff fails to meet any of the exceptions to the statute as identi?ed. Accordingly, counsel asserts that the plaintiff is bared from maintaining this action. Counsel relies upon an opinion of Ernest M. Caposela, of Passaic County, in which the Court dismissed a complaint ?led by National Collegiate Trust without prejudice for failure to state a claim. Apparently, plaintiff initially opposed the application to dismiss arguing that the Corporate Business Reporting Act did not apply because the plaintiff was a trust not a corporation. Thereafter, plaintiff ?led a motion for reconsideration arguing that plaintiff is ?not transacting business? within the State of New Jersey and therefore plaintiff is not obligated to comply with the ?ling requirements of the act. Judge Caposela sent a letter to the parties on December 2, 1014 explaining his reasoning. In the December 2, 2014 letter, the trial court held that National Collegiate Trust must comply with the Corporations Business Activities Reporting Act, should it wish to pursue litigation in the State of New Jersey. National Collegiate Student Loan Trust 2007-3 V. Guerson Heriveaux, et a1., Docket Number Judge Caposela determined that plaintiff conducts business in New Jersey because plaintiff derives income on defaulted loans through a trust account managed by a law ?rm in New Jersey. Plaintiffs Response With respect to defendant?s motion to dismiss pursuant to plaintiff? counsel argues that on a Motion to Dismiss for Failure to State a Claim, a Court ?searches 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.? Printing Mart- Morristown v. Sharp Electronics Corp., 116 NJ. 739, 746 (1989) (quoting Di Cristofaro v. Laurel Grove Memorial Park, 43 NJ. Super. 244, 252 (App. Div. 1957). Further, counsel asserts that every reasonable inference is therefore afforded the plaintiff and the motion is granted only in rare circumstances and ordinarily without prejudice. See, Banco Popular No. America v. M, 184 161, 165-166 (2005). Therefore, counsel contends that in searching the Complaint with liberality, it is clear that the Complaint satis?es the pleading requirements in New Jersey. Furthermore, with respect to defendant?s motion to dismiss pursuant to N.J.S.A. 14 to 23, counsel asserts that plaintiff is a foreign bank and not a foreign corporation. Counsel contends that the Supreme Court of New Jersey held that the Reporting Act does not apply to foreign banks. Speci?cally, the de?nition of ?corporation? as outlined in the Business Corporation Act is restricted to corporations organized under the Act and excludes banks, which are organized under Title 17. Moreover, the Court further ruled that ?neither the terms of the Reporting Act nor its legislative history suggest that the legislature intended to include foreign banks with the de?nition of ?corporation? contained in N.J.S.A. 14A: 1 3-1 7b. Counsel contends that because in the caption of the Complaint, Plaintiff is a Statutory Trust, by and through, US. Bank National Association, as trustee. Counsel contends that because the case Judge Caposela decided did not include the proper name of the company, it is not the same plaintiff and does not apply. Further, counsel states that after the October 2014 Order was granted, the full chain assignment was added to the Caption, thus making it exempt from the requirements. Moreover, counsel asserts that pursuant to the Recording Act, foreign corporations are exempt from the ?ling requirements of the Reporting Act in two instances: First, to be exempt, they are able to ?le a timely tax return under the Corporation Business Tax Act. This is required to determine the tax liability of foreign corporations. However, counsel contends that foreign banks are not subject to the New Jersey corporation tax and thus do not need to ?le a tax return. Associates Consumer Discount Co. v. Bozzarelo, 149 NJ. Super. 358, 362, 373 A. 2d 1016 (App. Div. 1977). As counsel previously stated, it is asserted that the Reporting Act was designed to facilitate the collection of corporate taxes which does not apply to banks. Second, counsel contends that foreign corporations can obtain a certi?cate of authority to do business in the state. However, counsel contends that this does not apply to a foreign bank, and therefore, requiring the plaintiff to ?le a certi?cate of authority would go against legislative intent and the interest of justice. Lastly, plaintiff counsel asserts that pursuant to the Banking Act of 1948, Article 44 and N.J.S.A. l, plaintiff is not prohibited from enforcing obligations in New Jersey Acquired by it in the Transaction of Business. Counsel asserts that in the instant case, defendants executed an education promissory note with PMorgan Chase Bank, NA. on April 19, 2006. Defendants failed to make the required payments and the loan defaulted. On or about February 1, 2013, JPMorgan Chase Bank, pursuant to N.J.S.A. (2) the banking act does not prohibit plaintiff from Contracting in this state With a banking institution to acquire, and acquiring in this State from such banking institution, a part interest in or the entire interest in any loan heretofore or hereafter made by such banking institution, together with a like interest in any security and any security instrument heretofore or hereafter given to such banking institution to secure or evidence such loan. Counsel believes that because plaintiff is not performing ?duciary activities, as a foreign bank they are required to obtain a certi?cate of authority. Defendant?s Reply Defense counsel alleges that plaintiff is trying to argue that by changing the caption of the case, they can now somehow now escape or bypass the requirements of the Reporting Act. Counsel also asserts that plaintiff also fails to provide a certi?cation in support of facts that are not part of the record. Namely, there is no evidence to support the genuineness of the promissory notes it claims to own. Defense counsel asserts that the American Bank case cited by plaintiff was a foreclosure case Where the original lien holder, American Bank Trust, foreclosed on property that it had ?nanced located in New Jersey, and that the Supreme Court of New Jersey held ?that a foreign bank that merely made loans to New Jersey borrowers was not ?transaction business? as a ?foreign corporation? and therefore need not obtain a certi?cate of authority. Counsel contends that the present case is completely different from the abovementioned case, in that the underlying promissory notes have allegedly been assigned repeatedly with no proof of the assignment. The National Collegiate Funding, LLC, US. Bank is not a lender, nor did it provide loans to the defendant. Furthermore, counsel argues that US. Bank as trustee, only hold property rights for the bene?t of National Collegiate Student Loan Trust 2006-2, which is the plaintiff in this case, and that plaintiff cannot claim that US. Bank holds any loans for its own bene?t. Defense counsel asserts the trust indenture attached to plaintiff opposition says that US. Bank is acting for the bene?t of plaintiff, and that US. Bank has a ?duciary duty to the plaintiff, so US. Bank cannot be said to be the sole bene?cial owner of the loan at issue. Therefore, defense counsel asserts that National Collegiate Trustis not a ?foreign bank? exempt under the Reporting Act. Request to Dismiss for Failure to State a Claim The Court must apply the following familiar standards to an application to dismiss a Complaint pursuant to B, "[O]ur inquiry is limited to examining the legal suf?ciency of the facts alleged on the face of the complaint." The essential test is simply "whether a cause of action is 'suggested? by the facts." In exercising this important function, "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." Moreover, "the [c]ourt is not concerned with the ability of plaintiffs to prove the allegation contained in the rather, "plaintiffs are entitled to every reasonable inference of fact." As we have stressed, "[t]he examination of a complaint's allegations of fact required by the aforestated principles should be one that is at once painstaking and undertaken with a generous and hospitable approach." Green v. Morgan Properties, 215 E21, 431, 451-52 (2013) (citations omitted). The issue is simply "whether a cause of action is suggested by the facts." Velantzas v. Colgate-Palmolive Co., 109 N.J. 189, 192 (1988). In deciding a motion pursuant to Rule 4:6-2(e), "[t]he motion judge must accept as true all factual assertions in the complaint ... [and] accord to the non-moving party every reasonable inference from those facts." Malik v. Ruttenberg, 398 NJ. Super. 489, 494 (App. Div. 2008). The judge must examine 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."' Green v. Morgan Props., 215 N.J. 431, 452 (2013) (quoting Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 746 (1989)). On a motion to dismiss for failure to state a claim under Rule 4:6-2(e), the court must only consider "the legal sufficiency of the alleged facts apparent on the face of the challenged claim." Rieder v. Dep't ofTransp., 221 N.J. Super. 547, 552 (App. Div. 1987) (internal quotation marks omitted). "The court may not consider anything other than whether the complaint states a cognizable cause of action." Ibid. The court must "accept as true the facts alleged in the complaint," Darakjian v. Hann~ 366 NJ. Super. 238, 242 (App. Div. 2004), and "search[] 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," Printing Mart-Morristown, .supr~ 116 N.J. at 746 (internal quotation marks omitted). The party opposing the motion is "entitled to every reasonable inference of fact." Ibid. The trial court has been instructed by the Supreme Court that Motions to dismiss should rarely be granted, and an order granting a motion to dismiss under Rule 4:6-2(e) should usually be without prejudice, so that the plaintiff may have an opportunity to re-plead, if he can do so, to state a viable cause of action. Nostrame v. Santiago 213 N.J. 109, 128 (2013); Hoffman v. Hampshire 8 Labs Inc. 405 NJ. Super. 105, 116 (App. Div. 2009); Printing Mart-Morristown, supra, 116 at 771 -72. Request to Dismiss for Failure to Comply with N.J.S.A. to 23 N.J.S.A. 14A213-15 provides: Every foreign corporation which during any calendar or ?scal accounting year ending after December 31, 1973, carried on any activity or owned or maintained any property in this State, unless speci?cally exempted under section 3 of this act, shall be required to ?le a notice of business activities report, as hereinafter provided. Activities or property maintenance in this State which require corporations to ?le this report are: a. the maintenance in this State of an of?ce or other place of business; or b. the maintenance of personnel 1n this State including the presence of employees, agents representatives or independent contractors in connection with the corporation? 5 business, even though not regularly stationed in this State; or c. the ownership or maintenance of real and/ or tangible personal property directly used by the corporation in this State; or d. the ownership or maintenance of tangible and/or intangible property in this State which is used by others; or 6. receiving payments from persons residing in this State, or businesses located in this State, aggregating in excess of $25,000.00 regardless of any other connections with this State; or f. the derivation of income from any source or sources within this State; or g. any other activity or property in, or interrelationships with, this State as designated by the director. Request to Consolidate Cases As stated above, defense counsel certi?es that both cases arise out of the same series of transactions and involve similar questions of law and fact. Plaintiffs counsel agrees that both cases involve a common question of law or fact, however, plaintiff? counsel alleges that they do not arises out of the same series of transactions. Counsel states that involves an Education One Undergraduate Loan guaranteed by PMorgan Chase Bank, NA. executed on April 19, 2006 at an interest rate of 10.825% with a repayment start date of February 28, 2007. Case involves an Education One Graduate Loan guaranteed by Bank One, JPMorgan Chase Bank, NA, executed on July 6, 2005 at an interest rate of 8.701% with a repayment start date of December 5, 2006. Since the student loans were taken out at different times, accrued interest at different rates, and have different repayment terms, and different start dates, counsel alleges that they do not arise out of the same series of transactions, and as a matter of law, counsel believes defendant?s motion to consolidate should be denied. 13, 4:3 8?l(a) governs consolidation of actions and provides: Actions in the Superior Court. When actions involving a common question of law or fact arising out of the same transaction or series of transactions are pending in the Superior Court, the court on a party's or its own motion may order the actions consolidated. If the actions are not triable in the same county or vicinage, the order shall be made by the Assignment Judge of the county in which the venue is laid in the action first instituted on motion, the judge's own initiative, or on certi?cation of the matter to the judge by a judge of the Law or Chancery Division. Conclusions As to the defendant?s motion to dismiss plaintiff Complaint due to the plaintiffs lack of compliance with N.J.S.A l4Azl3-15, the Court agrees with Judge Caposela?s December 2, 2014, opinion in National Collegiate Student Loan Trust 2007-3 v. Guerson Heriveaux and Maryann G_alan._ Although this Court recognizes that an unrerported Passaic County trial level opinion is not binding on this court, the Court ?nds the two cases indistinguishable in their basis of fact and agrees with the reasoning of Judge Caposela. As stated by Judge Caposela: The plaintiff conducts business in New Jersey by Virtue of deriving income on defaulted loans through a trust account managed by its law ?rm, Schacter Pomeroy, in Princeton. The plaintiff also derives income from New Jersey 10 residents, including the defendants in this action, by collecting payments on the defaulted student loan(s) which it acquires from various banking and lending institutions. Further, Schacter Pomeroy does more than litigate on behalf of plaintiff, the law ?rm maintains a trust account for the payment of defaulted student loans, presumably for a fee, and serves as its ?agent? or an ?independent contractor? under a business arrangement between the two entities. Because the plaintiff transacts business beyond the limits of litigation, its business activities are within the ambit of the Corporation Business Activities Reporting Act, and trigger the Act?s reporting requirements as well as its bar on access to New Jersey Courts. The plaintiff is not forever outside of the Court?s door; should it wish to pursue litigation in New Jersey, it merely must comply with the New Jersey Corporation Business Activities Reporting Act, N.J.S.A. Section 14A213-15, and ?le a report of activities. Furthermore, the Court must agree with defense counsel that plaintiff simply adding to the caption ?by and through, US. Bank National Association, as Trustee,? does not remove National Collegiate Student Loan Trust from the obligations imposed by the Reporting Act. Conversely, the Court must agree that US. Bank, as trustee, only holds property rights for the bene?t of National Collegiate Student Loan Trust 2006?2. As such, the Court ?nds that National Collegiate Trust is not a foreign bank, but is instead a business which is within the ambit of the Corporation Business Activities Reporting Act, and as such must comply with said act. Accordingly, defendant?s motion is granted. Plaintiffs motion is dismissed without prejudice pending compliance with the Corporation Business Activities Reporting Act. For the abovementioned reasons, the Court does not ?nd it necessary to consider the issue of consolidation and as such, this portion of defendant?s motion is denied as moot. An appropriate Order has been entered. Conformed copies accompany this Memorandum of Decision. A copy of the Order and a copy of this Memorandum of Decision shall be served on all counsel within the next seven days. James P. Savio, J.S.C. ll