United States District Court, D. Utah
Michael Vazquez, U.S.D.J.
case concerns Defendant's allegedly improper appraisal of
a property located in Moab, Utah. D.E. 1. Currently pending
before this Court is a motion to dismiss or transfer, D.E.
10, filed by Defendant Valli D. Smouse d/b/a Smouse Appraisal
Service. Defendant seeks dismissal for lack of
personal jurisdiction, or in the alternative, transfer
pursuant to 28 U.S.C. § 1631. The Court has reviewed the
motion, the filings in support and in opposition, and the
record. The Court considered the motions without
oral argument pursuant to Fed.R.Civ.P. 78(b) and L. Civ. R.
78.1(b). For the reasons stated below, Defendant's motion
to transfer is granted, Defendant's motion to dismiss is
denied, and the case is transferred to the District of Utah.
American Financial Resources, Inc. is a New Jersey
originator, broker, and servicer of mortgage loans that
bought (and later sold) a residential mortgage on a property
in Moab, Utah. Compl. ¶¶ 1, 13, 15. Defendant, an
individual residing in Moab, Utah and doing business as
Smouse Appraisal Service, appraised the property at the
request of Primary Residential Mortgage, Inc.
(“Primary”), a residential mortgage originator
located in Utah. Id. ¶ 7; D.E. 1-1
(“Appraisal”); D.E. 12 at 3.
Appraisal contained two general types of information:
specific information regarding the appraised property and
“comparator” information which detailed the
prices of similar properties in the Moab area. Appraisal at
1-7. Based on Defendant's visit to the home and analysis
of the comparators, Defendant appraised the property at $287,
000. Compl. ¶ 8.
21 of the Appraisal included the following language:
The lender/client may disclose or distribute this appraisal
report to: the borrower; another lender at the request of the
borrower; the mortgagee or its successors and assigns;
mortgage insurers; government sponsored enterprises; other
secondary market participants; data collection or reporting
services; professional appraisal organizations; any
department agency, or instrumentality of the United States
and any state, the District of Columbia or other
jurisdictions; without having to obtain the appraiser's
or supervisory appraiser's (if applicable) consent.
Appraisal at 7. The Appraisal defined
“lender/client” as Primary. Id. at 1.
The property ultimately sold for the appraised price, and the
purchasers took out a mortgage with Primary to cover
approximately 95% of the purchase price. Compl. ¶ 13.
property's $272, 650 Fannie Mae-eligible mortgage was
eventually bought by Plaintiff. Id. ¶¶ 1,
13, 15. Plaintiff then sold the mortgage to Seneca Mortgage
Servicing, LLC (“Seneca”), a company incorporated
in Delaware with its principle place of business in
Massachusetts. Id. ¶ 16. On May 20, 2016,
Seneca received a letter from Fannie Mae identifying a
“significant defect” in the Appraisal's
compliance with Fannie Mae's appraisal guidelines. D.E.
1-2 at 1. Based on this letter, Fannie Mae “determined
that repurchase of the subject loan [by Plaintiff] [was] the
appropriate remedy.” Id. at 1.
14, 2016, Defendant updated her appraisal. Compl. ¶ 19.
The Complaint does not allege how Defendant found out about
the May 20, 2016 letter or to whom Defendant provided the
updated appraisal. However, according to the Complaint, by
July 19, 2016 Fannie Mae received a copy of the updated
appraisal. Compl. ¶ 19; see also D.E. 1-3.
Several months later, in November 2016, Fannie Mae issued a
second notice that a “significant defect”
remained, requiring Plaintiff to repurchase the loan. Compl.
¶ 20; see also D.E. 1-3.
March 8, 2017, Plaintiff contacted Defendant regarding the
continued deficiencies in the Appraisal. Compl. ¶¶
21-24. After a series of communications with Defendant's
representatives failed to resolve Plaintiffs demand of $121,
251.27, Plaintiff initiated this action. Id.
filed its Complaint on November 22, 2017, alleging breach of
contract and unjust enrichment. Id. Defendant moves
to dismiss the Complaint for lack of personal jurisdiction
and improper venue pursuant to Federal Rule of Civil
Procedure 12(b)(2) and 12(b)(3). D.E. 10. As to personal
jurisdiction, Defendant first argues that she has no
continuous or systematic contacts with the state of New
Jersey sufficient to establish general jurisdiction. Def. Br.
at 6-7, 9-10. Second, Defendant argues that the Court lacks
specific jurisdiction because she never purposefully availed
herself to the state of New Jersey and that any contacts with
New Jersey related to this action are merely random,
fortuitous, or attenuated. Id. at 7-9. In the
alternative, Defendant argues that venue is improper and the
Court should transfer this action under 28 U.S.C. §
1631. Id. at 11-12.
response to Defendant's motion, Plaintiff concedes that
this Court lacks general personal jurisdiction but argues
that the Court may exercise specific jurisdiction over
Defendant. Pl. Opp'n at 4. Specifically, Plaintiff argues
that under Paragraph 21 of the Appraisal, Defendant knew that
her Appraisal could be disclosed to mortgagees, assigns, and
insurers, including Plaintiff. Id. at 5. Thus,