Jody Kimbrell v. FHFA
Filed Nonprecedential Disposition PER CURIAM. We have reviewed the remaining arguments, and none has merit. We also note that Kimbrell has filed in this court a motion under Federal Rule of Civil Procedure 60(d)(3), seeking to set aside the district court s judgment because of alleged fraud. This motion is frivolous and has been filed in the wrong court to boot. It is DENIED, and the judgment is AFFIRMED. Frank H. Easterbrook, Circuit Judge; Ann Claire Williams, Circuit Judge and Diane S. Sykes, Circuit Judge. [6815765-2] [6830295-1]  [16-2992]
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted February 13, 2017 *
Decided March 31, 2017
FRANK H. EASTERBROOK, Circuit Judge
ANN CLAIRE WILLIAMS, Circuit Judge
DIANE S. SYKES, Circuit Judge
FEDERAL HOUSING FINANCE
Appeal from the United States District
Court for the Central District of Illinois.
Joe Billy McDade,
Jody Kimbrell sued the Federal Housing Finance Agency, contending that it
violated various federal and state laws by failing to oversee properly the Federal
National Mortgage Association, commonly known as Fannie Mae. The district court
construed her complaint as attempting to raise claims under three statutes: the Housing
and Economic Recovery Act of 2008, the Administrative Procedure Act, and the Federal
We have agreed to decide this case without oral argument because the briefs
and record adequately present the facts and legal arguments, and oral argument would
not significantly aid the court. See FED. R. APP. P. 34(a)(2)(C).
Tort Claims Act. It dismissed all claims as legally baseless. We conclude that her
complaint indeed fails to state a claim, so we affirm.
Kimbrell mortgaged property that she owned in Peoria, Illinois, through her
realty company, borrowing over $2 million. The mortgage was eventually serviced by
Wells Fargo and bought by Fannie Mae, which buys and guarantees residential
mortgages, 12 U.S.C. §§ 1716, 1716(b); DeKalb Cty. v. Fed. Hous. Fin. Agency, 741 F.3d 795,
797 (7th Cir. 2013). Kimbrell later transferred a parcel of the property from her company
to herself in order to construct a multi-family dwelling. When Wells Fargo found out, it
declared the transfer a violation of the mortgage agreement because it removed
collateral securing the loan. As a result Kimbrell owed Wells Fargo $15,000, but she
refused to pay, prompting Wells Fargo to reject her proffered monthly mortgage
payments. Fannie Mae then declared the mortgage in default. To reduce its financial
risks, Fannie Mae assigned the mortgage and deeded the property to a holding
corporation managed by Fannie Mae employees. It later foreclosed upon the property,
which was sold at a judicial sale.
At the time of the foreclosure, Fannie Mae was under the conservatorship of the
Federal Housing Finance Agency, which gave the Agency control over Fannie Mae.
See 12 U.S.C. § 4617(a)(2); DeKalb Cty., 741 F.3d at 797–98. The Agency was created by the
Housing and Economic Recovery Act of 2008, Pub. L. No. 110–289,122 Stat. 2654, to
regulate and supervise Fannie Mae and other financial entities, see 12 U.S.C. §§ 4511,
4513(a)(2)(B). Kimbrell complained to the Agency about Fannie Mae’s foreclosure
process. She asserted that her payments were current when Fannie Mae declared default
and that its employees personally gained from the foreclosure because the assigned deed
was in their names. The Agency dismissed her complaint, finding no factual basis for her
Dissatisfied, Kimbrell sued the Agency, alleging that it failed to oversee Fannie
Mae as required by the Housing and Economic Recovery Act and its regulations. She
believes that the Agency should have stopped Fannie Mae from, in her view, using
fraudulent papers to foreclose on her property, and it should have responded to her
complaint about fraud by taking action against Fannie Mae. Kimbrell sought to hold the
Agency liable for Fannie Mae’s alleged fraud and to enjoin the latter from selling her
property and taking its rents.
The district court dismissed her complaint with prejudice. First, the court
concluded that Kimbrell could not sue the Agency under the Housing and Economic
Recovery Act because that Act’s text allows only regulated entities to sue the Agency,
see 12 U.S.C. § 4513(c)(2). Second, the court ruled that if she sought to raise claims under
the Administrative Procedure Act, either to challenge the Agency’s failure to act or its
dismissal of her administrative complaint, these claims failed as a matter of law. Third,
the court rejected her tort claims because the Federal Tort Claims Act bars actions for
fraud, and her tort claims all arose from an alleged fraud. For similar reasons and
because the Act explicitly bars courts from restraining the Agency acting as conservator,
see 12 U.S.C. § 4617(f), the court denied her request for injunctive relief. The court
acknowledged that pro se parties usually get a chance to cure defects in a complaint, but
the court refused to give one in this case because of the “nature of the claims.” 1
On appeal Kimbrell challenges both the dismissal of her complaint and the refusal
to offer an opportunity to amend her complaint. She begins by arguing that she can sue
the Agency under the Housing and Economic Recovery Act. The Act does not expressly
provide a private right of action, so the only way that she can sue under it is if the right is
implied. Int'l Union of Operating Eng’rs, Local 150, AFL-CIO v. Ward, 563 F.3d 276, 282
(7th Cir. 2009). For a right to be implied, the text or structure of the Act must signal that
Congress intended a private right of action. Gonzaga Univ. v. Doe, 536 U.S. 273, 286 (2002);
Teamsters Local Union No. 705 v. Burlington N. Santa Fe, LLC, 741 F.3d 819, 823–24 (7th Cir.
2014). But the Act subjects the Agency to suit only by “regulated entities,” e.g., Fannie
Mae, and never mentions private persons. This confirms that Congress intended suits
only by regulated entities. See Dersch Energies, Inc. v. Shell Oil Co., 314 F.3d 846, 857
(7th Cir. 2002) (concluding that statute’s explicit right of action for franchisors signaled
that Congress did not intend suits by franchisees).
Moreover, Congress provided other means of redressing wrongs by Fannie
Mae—it subjected the organization to suit directly (an option that Kimbrell has already
pursued), 12 U.S.C. § 1723a(a); Lightfoot v. Cendant Mortg. Corp., 137 S. Ct. 553 (2017). This
confirms that the Act does not create a private right of action. See Alexander v. Sandoval,
Kimbrell’s suit raises the same allegations of fraud that she raised twice in state
court—first, when she opposed foreclosure, and in a later case, when she sued Fannie
Mae. In her suit against Fannie Mae, Illinois courts considered and rejected her
allegations of fraud on preclusion grounds. See Kimbrell v. Wells Fargo, 2015 IL 140718-U,
2015 WL 5772108 (Ill. App. Ct. 2015) (holding that res judicata barred fraud claims
because they were litigated in her earlier foreclosure proceedings). Issue or claim
preclusion may indeed bar some of her claims in this case, but the Agency has never
raised that affirmative defense—neither in the district court nor here. We therefore do
not address preclusion. See McDonald v. Adamson, 840 F.3d 343, 346–47 (7th Cir. 2016).
532 U.S. 275, 290 (2001) (reasoning that Congress signals no private right when it
provides other means of prosecuting violations of the statute); Miller Aviation v.
Milwaukee Cty. Bd. of Supervisors, 273 F.3d 722, 731 (7th Cir. 2001) (same).
Next Kimbrell generally challenges the dismissal of her claims under the
Administrative Procedure Act. To the extent that she faults the Agency for failing to stop
Fannie Mae’s foreclosure proceedings against her, her claim fails because she has not
identified—and we cannot find—a statute or regulation requiring the Agency to do so.
See Norton v. S. Utah Wilderness All., 542 U.S. 55, 65–66 (2004) (holding that courts can
compel agencies to take only those actions “demanded by law,” and when law permits
discretion in how to achieve statutory directive, courts cannot compel a specific action to
achieve that directive); Wyoming v. United States Dep’t of Interior, 839 F.3d 938, 945
(10th Cir. 2016) (concluding that nothing in act or regulation required agency to take
animal-removal action that plaintiffs contended the agency failed to take).
To the extent that she seeks review of the Agency’s rejection of her administrative
complaint, her claim runs into a similar roadblock. She identifies no part of the Housing
and Economic Recovery Act or its regulations requiring the Agency to address
administrative complaints. The absence of a complaint-filing process leaves us with no
standard to review the Agency’s decision on her complaint. And without such a
standard, judicial review is not available. See 5 U.S.C. § 701(a)(2); Heckler v. Chaney, 470
U.S. 821, 837–38 (1985); Fleszar v. U.S. Dep’t of Labor, 598 F.3d 912, 914–15 (7th Cir. 2010).
Kimbrell also challenges the dismissal of her claims under the Federal Tort
Claims Act, 28 U.S.C. § 1346(b). That statute excludes claims arising out of
misrepresentation and deceit, 28 U.S.C. § 2680(h); United States v. Neustadt, 366 U.S. 696,
701–02 (1961), such as claims for negligently or willfully preparing and disseminating
false information. See Paul v. United States, 929 F.2d 1202, 1204 (7th Cir. 1991); Deloria v.
Veterans Admin., 927 F.2d 1009, 1012–13 (7th Cir. 1991); JBP Acquisitions, LP v. U.S. ex rel.
Fed. Deposit Ins. Corp., 224 F.3d 1260, 1265–66 (11th Cir. 2000); see also Life Partners Inc. v.
United States, 650 F.3d 1026, 1032 (5th Cir. 2011). Kimbrell accuses federal officials of
knowingly using falsified mortgage documents to defraud her out of her property. Her
claims arise from this alleged fraud and, therefore, fall within the statute’s exclusion.
Lastly, Kimbrell says that the district court erred by dismissing the action without
giving her a chance to amend her complaint. Although ordinarily a plaintiff should get
one chance to patch up a complaint, Runnion ex rel. Runnion v. Girl Scouts of Greater
Chicago & N.W. Indiana, 786 F.3d 510, 519 (7th Cir. 2015), this opportunity is not necessary
where the plaintiff does not ask for it, Gonzalez-Koeneke v. West, 791 F.3d 801, 809 (7th Cir.
2015); James Cape & Sons Co. v. PCC Constr. Co., 453 F.3d 396, 401 (7th Cir. 2006), or the
defects cannot be corrected, Arlin-Golf, LLC v. Vill. of Arlington Heights, 631 F.3d 818, 823
(7th Cir. 2011). Kimbrell never asked for permission to amend her complaint or
explained how she would correct it. And the defects cannot be cured because the statutes
that she invokes cannot afford her relief, as the district court rightly explained.
We have reviewed the remaining arguments, and none has merit. We also note
that Kimbrell has filed in this court a motion under Federal Rule of Civil Procedure
60(d)(3), seeking to set aside the district court’s judgment because of alleged fraud. This
motion is frivolous and has been filed in the wrong court to boot. It is DENIED, and the
judgment is AFFIRMED.
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