# Motion — Attorney General of New Jersey v. First Family Mortgage Corp.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0670%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Motion
- **Published:** January 1, 1988
- **Citation:** 487 U.S. 1213

## Text

No. 87-937 | JUN 15 1988
PNA AE ET EAN i : 1OL, UR

CLERK

—
Supreme Court, U.S.
FILED

Iu the Supreme Court of the Wuiitey Stare —

OCTOBER TERM, 1987

ATTORNEY GENERAL OF NEW JERSEY,
PETITIONER

V.

FIRST FAMILY MORTGAGE CORPORATION OF FLORIDA,
RESPONDENT

On Writ of Certiorari to the
Supreme Court of New Jersey

MOTION OF RESPONDENT TO DISMISS OR VACATE

STEPHEN M. SHAPIRO
Counsel of Record
ANDREW L. FREY
KENNETH §S. GELLER
JOHN E. MUENCH
Mayer, Brown & Platt
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(202) 463-2000

Counsel for Respondent

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

TABLE OF CONTENTS

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TABLE OF AUTHORITIES
Cases:

Board of License Commissioners of Tiverton V.
PPUEOT OD, GD UE, TI cnnenencccnececocsntesessspucssennsenascasas
City of Los Angeles v. Lyons, 461 U.S. 95 ..............
DeF unis v. Odegaard, 416 U.S. 312 ..........................
Diamond Vv. Charles, 106 S.Ct. 1697 .......0..000200222 22.
District Attorney v. Sacramento County Civil
Service Comm’n, 449 U.S. 811 ...............................
Garvin V. Cochran, 371 U.S. 27 ................................
Hammond Clock Co. v. Schiff, 293 U.S. 529 ............
J. Aron & Co., Inc. Vv. Mississippi Shipping Co.,
Ss I ie ecahieamnineneie
Lane V. Williams, 455 U.S. 624 ......................-..--- PROPOR
Logan V. Strickland, 440 U.S. 902............00000.00000....
Michigan yv. Shabaz, 106 S.Ct. 3326
Murphy V. Hunt, 455 U.S. 478 ...................................
North Carolina v. Rice, 404 U.S. 244 _.0000 0.
Pasadena City Board of Education Vv. Spangler,
427 US. 434 ......... CSD IYER. hell) Yost COED
Powell v. McCormack, 395 U.S. 486 ......................---
Riley v. International Brotherhood of Teamsters,
SE REC aI ee ee
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Shoecraft v. Catholic Social Services Bureau, 107

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TABLE OF AUTHORITIES—Continued

Page
Stewart v. Southern Railway Co., 315 U.S. 784........ 8
United States Parole Comm’n V. Geraghty, 445
Ty ith SUMED xstinaiscescinsntonisaiciticonne ches suneadiomsahaneiaaaabseandaniiadedan 10
Weinstein v. Bradford, 423 U.S. 147.................22......
Statutes :
National Housing Act, 12 U.S.C. § 1716 et seq..... 4,5
Corporation Business Activities Reporting Act,
N.J.S.A. 144A :13-14 to 13-238:
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Pi ei adic BED STOO enccancscdcascciscrmaseninmnsiabeseinandann 3, 5
N.J.S.A. 14A 218-200 (1) ..0...222.20..00.22...0.0essscccceceenes 3
Regulations:
GNMA Handbook 5500.1, Revision 6:
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I Bol BO DD hvedinicti cisccicnsesnesensaaeesenees 2, 12

MOET, BD, GED ncoccctcnicevnceniocnidmsstineaademaa 13

Iu the Supreme Court of the United States

OCTOBER TERM, 1987

No. 87-937

ATTORNEY GENERAL OF NEW JERSEY,
PETITIONER

Ve

FIRST FAMILY MORTGAGE CORPORATION OF FLORIDA,
RESPONDENT

On Writ of Certiorari to the
Supreme Court of New Jersey

MOTION OF RESPONDENT TO DISMISS OR VACATE

Respondent First Family Mortgage Corporation of
Florida (“First Family”) respectfully suggests that this
case is moot because the underlying dispute between the
real parties in interest has been resolved.' First Family
therefore requests this Court to vacate its order granting
certiorari and to dismiss the petition as moot or to vacate
the judgment of the Supreme Court of New Jersey and
remand the cause for such proceedings as that court
deems appropriate. In the alternative, First Family re-
quests this Court to dismiss the writ as improvidently
granted.

1 Pursuant to Rule 28.1 of the Rules of this Court, respondent
states that First Family Mortgage Corporation of Florida is a
Florida corporation and a wholly-owned subsidiary of FN Projects
Inc., which in turn is a wholly-owned subsidiary of First Nation-
wide Bank, which in turn is a wholly-owned subsidiary of First
Nationwide Financial Corporation, which in turn is a wholly-owned
subsidiary of Ford Motor Company. First Family has no subsidi-
aries and no other affiliates whose shares are traded on any exchange.

2

STATEMENT

1. First Family is a Florida Corporation whose prin-
cipal place of business is in Illinois. First Family has no
officers, employees or representatives in New Jersey and
has originated no mortgage loans in New Jersey. Pet.
App. 3a. On July 24, 1980, First Family acquired a pack-
age of mortgage loans from Mid States Mortgage &
Service Company, an Illincis corporation, in the second-
ary mortgage market. Pet. App. 3a.° The mortgagor on
one of the loans secured by New Jersey real estate was
the defendant in the trial court, Linda A. Durham. First
Family assigned all of the mortgages (including the
Durham mortgage) to the Government National Mort-
gage Association (“GNMA”) pursuant to the Mortgage-
Backed Securities Program administered by GNMA, but
retained “nominal title to the pooled mortgages solely
to facilitate servicing of the mortgages.” GNMA Hand-
book 5500.1, Revision 6, at 9-4 to 9-5.

2. On January 1, 1983, Ms. Durham defaulted on her
monthly mortgage loan payments, and on July 13, 1983,
First Family filed a foreclosure action against Ms. Dur-
ham in the Chancery Division of the Superior Court of
New Jersey. The trial court raised the question whether
the foreclosure complaint was subject to dismissal be-
cause First Family had not filed a Notice of Business
Activities Report (“Activities Report”) pursuant to the
New Jersey Corporation Business Activities Reporting
Act (the “Reporting Act”), N.J.S.A. 14a:13-14 to 13-23.

* Mid States, in turn, had acquired the loans in the secondary
market from lenders that had originated the loans and that were
not subject to the reporting requirements of the New Jersey Cor-
poration Business Activities Reporting Act, N.J.S.A. 14A:13-14 to
13-23.

* A counterclaim filed by Ms. Durham is still pending in the trial
court. It involves a claim of tortious interference by First Family
with Ms. Durham's business interests. As petitioner has advised
the Court, the counterclaim has “no relevance” to the constitutional
question raised by the petition. Pet. 4 n.*.

3

The Reporting Act requires a foreign corporation to
file an Activities Report if during any “accounting year”
the corporation “receive|s}] payments from persons re-
siding in this State * * * aggregating in excess of $25,000
regardless of any other connection with this State.”
N.J.S.A. 14A4:13-15e. The Reporting Act also contains
a door-closing sanction for failure to file a required Ac-
tivities Report: “The failure of a foreign corporation to
file a timely report shall prevent the use of the courts
in this State for all * * * causes of action that arose at
any time prior to the end of the last accounting period
for which the corporation failed to file a required report.”
N.J.S.A. 14A:13-20b. However, the door-closing sanc-
tion does not apply where the foreign corporation’s “fail-
ure to file a timely report was done in ignorance of the
requirement to file” and “such ignorance was reasonable
in all [the] circumstances.” N.J.S.A. 14A:13-20¢e(1).

First Family did not dispute that it had received fees
in excess of $25,000 for servicing the GNMA loans se-
cured by New Jersey real estate that First Family had
acquired in the secondary mortgage market. Nor did
First Family dispute that the foreclosure cause of ac-
tion arose “prior to the end of the last accounting pe-
riod” for which it had not filed an Activities Report.‘
First Family contended, however, that the Reporting

* There was no hearing in the trial court on the question whether
First Family was justifiably unaware that it had an obliration to
file the Activities Report and therefore was exempt from the door-
closing sanction. The dismissal of First Family’s complaint, how-
ever, was without prejudice; as petitioner has acknowledged
throughout this litigation, First Family would have been free, had
this case not become moot, to refile its complaint and proceed with
its foreclosure action upon a showing of “justifiable ignorance of
the reporting requirements,” no matter how the constitutional ques-
tions raised by the petition might be resolved. Brief on Behalf of
Intervenor Attorney General of New Jersey in Opposition to Motion
for Leave to Appeal to the New Jersey Supreme Court at 6. If the
Reporting Act were ever to be raised in any future proceeding
involving First Family, it is prepared to make the required showing.

Act violates the Commerce ‘ se of the United Stats
Const Lu n to the extent that t closes the New Jet s
courts to a foreign corporation whose sole contact wit!
New Jersey is the receipt of fees for servicing GNMA
mortgages, raul by New Jersey real estate. that wer
acquired in the interstate secondary mortgage market
First Family aleo contended that the Reporting A
applied to an action seeking to ef —_—
GNMA mortgage, violates the Supremacy 7 -
it conflicts wit) nd frustrates the purposes of) th
Natior H sing Act. 12 USE IT1G ef a nel the
regulations promulgated thereunder

3. The tr wrt, without d mn. rejected |
Family's Supremacy ‘ e claim. Pet. App. 72a. How
ever, after an exhaustive review of this Court's d
on the subject of “door-closing” (Pet. App. 6la-7la
the t t led that “/tlot 1 g p
ation ich as First Family! from access to our co
where it not engaged in intrastate commerce is ai
impermissible burden on interstate commerce” ( Pet. Ap
Tla). Ne the ') rt held t) > wane }
by a m New Jersey case to disn the complaint for
failure to comply with the Reporting Act. P App. 7la
The Appellate Dis n affirmed, noting that First Fan
ily was free to renew its for ire action against M
Durham upor howing that it w tiflably unaw
of the reporting | ment. Pet. App. 5la. Se

note 4

The Supreme Court of New Jersey, i
cision, held that New Jersey : lr e First Family
to file an Activities Report and | “withhold , )
to |its! « ts f First Family! complies.” Pet. App |
2: (emphas : in origir Hi weve) o} . b
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5a

APPENDIX B

In the Supreme Court of the United States

OCTOBER TERM, 1987
No. 87-717

FIRST FAMILY MORTGAGE CORPORATION OF FLORIDA,
APPELLANT

We

LINDA A. DURHAM and Mr. LINDA A. DURHAM,
APPELLEES

and

ATTORNEY GENERAL OF NEW JERSEY, APPELLEE

On Appeal from the
Supreme Court of New Jersey

MOTION TO DISMISS PURSUANT TO RULE 53

Now comes appellant in the above-captioned matter
and moves, pursuant to Rule 53, that its appeal be dis-
missed. All fees due the Clerk have been paid, and there
are no additional costs due.*

* Pursuant to Rule 28.1 of the Rules of this Court, appellant
states that First Family Mortgage Corporation of Florida is a
Florida ec poration and a wholly-owned subsidiary of FN Projects
Inc., which in turn is a wholly-owned subsidiary of First Nationwide
Bank, which in turn is a wholly-owned subsidiary of First Nation-
wide Financial Corporation, which in turn is a wholly-owned sub-
sidiary of Ford Motor Company. First Family has no subsidiaries
and no other affiliates whose shares are traded on any exchange.

6a

s/ Stephen M. Shapiro/ALF
STEPHEN M. SHAPIRO
Counsel of Record
ANDREW L. FREY
MAYER, BROWN & PLATT
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20°96
(202) 463-2000
Counsel for Appellant

June 6, 1988

7a

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0670%3A2. Public record. Not legal advice.