Opinion ID: 4257745
Heading Depth: 2
Heading Rank: 2

Heading: New Jersey’s Entire Controversy Doctrine

Text: “To survive a motion to dismiss [brought under Rule 12(b)(6)], a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is 6 plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation marks and citation omitted). The District Court concluded that Shibles’s amended complaint failed to state a claim for which relief could be granted because New Jersey’s entire controversy doctrine barred each asserted claim. We agree. New Jersey’s entire controversy doctrine “embodies the principle that the adjudication of a legal controversy should occur in one litigation in only one court; accordingly, all parties involved in a litigation should at the very least present in that proceeding all of their claims and defenses that are related to the underlying controversy.” Wadeer v. N.J. Mfrs. Ins. Co., 110 A.3d 19, 27 (N.J. 2015) (citation omitted). We have characterized the doctrine as “New Jersey’s specific, and idiosyncratic, application of traditional res judicata principles.” Ricketti v. Barry, 775 F.3d 611, 613 (3d Cir. 2015) (citation omitted). The doctrine “applies in federal courts when there was a previous state-court action involving the same transaction[.]” Id. (quotation marks and citation omitted). “There is no doubt that the entire controversy doctrine applies to foreclosure proceedings, but only to claims that could have been filed in the foreclosure action, that is, only to claims that were germane to the foreclosure proceeding.” Delacruz v. Alfieri, 145 A.3d 695, 701 (N.J. Super. Ct. Law Div. 2015) (emphasis omitted).5 The New 5 “Germane” claims include claims that “attack the validity of the mortgage, the amount due, or the right of the [lender] to foreclose.” Delacruz, 145 A.3d at 702; see also Adelman v. BSI Fin. Servs., Inc., --- A.3d ---, 2018 WL 636756, at  (N.J. Super. Ct. App. Div. Jan. 31, 2018) (treating as “germane” state law fraud and breach of contract claims identical to those Shibles brought here). Shibles does not dispute that the claims 7 Jersey Superior Court, Appellate Division recently re-affirmed that basic tenant of state law, explaining that “[a] defendant in a foreclosure case may not fail to diligently pursue a germane defense and then pursue a civil case against the lender alleging fraud by foreclosure.” Adelman v. BSI Fin. Servs., Inc., --- A.3d ---, 2018 WL 636756, at  (N.J. Super. Ct. App. Div. Jan. 31, 2018). Shibles could have brought her state law fraud and breach of contract claims in the underlying foreclosure action. She did not. Accordingly, the District Court rightly dismissed Shibles’s amended complaint pursuant to the entire controversy doctrine.6