Yocum v. Nationstar Mortgage LLC

Filing 74

*** WITHDRAWN per 76/TEXT ORDER *** MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION For the reasons explained within, the undersigned finds Plaintiff has knowingly and intentionally made false representations of material fact to the court. The undersigned RECOMMENDS this action be dismissed with prejudice. The undersigned further RECOMMENDS the court retain jurisdiction to determine whether costs, including attorneys' fees and expenses, should be taxed to Plaintiff James A. Yocum , Jr. Any party may file specific written objections to this report and recommendation within fourteen days from the date it is filed in the office of the Clerk. Signed by Magistrate Judge Staci G Cornelius on 8/24/17. (SAC ) Modified on 8/24/2017 (SAC, ).

FILED
2017 Aug-24 AM 11:41
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
JAMES A. YOCUM, JR.,

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Plaintiff,
v.
NATIONSTAR MORTGAGE, LLC, et al.,
Defendants.

Case No.: 2:14-cv-00970-SGC

MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION
This matter is before the undersigned on the motion for sanctions filed by Nationstar
Mortgage, LLC (“Nationstar”), on May 23, 2017. (Doc. 68). In its motion, Nationstar asserts
this action is due to be dismissed because Plaintiff has repeatedly made false statements to the
court. (Id.). Nationstar also seeks attorneys’ fees and costs. (Id.). The motion is fully briefed
and ripe for review.

(Docs. 72, 73).

For the reasons discussed below, the undersigned

recommends dismissal without prejudice as an appropriate sanction and further recommends the
court retain jurisdiction to determine whether costs, including attorneys’ fees and expenses,
should be taxed to Plaintiff James A. Yocum, Jr.
I. FACTS AND PROCEDURAL HISTORY
A. Plaintiff’s Pleadings
1. First Amended Complaint
Plaintiff James Yocum initiated this action pro se by filing a verified complaint in the
Circuit Court of Jefferson County, Alabama, on April 18, 2014. (Doc. 1-1 at 2). Nationstar
removed this case to federal court on May 23, 2014. (Doc. 1). On May 29, 2014, Plaintiff filed
his first amended complaint (the “FAC”). (Doc. 5). In the FAC, Plaintiff asserted claims against
Nationstar and Renasant Bank (“Renasant”) pursuant to the Real Estate Settlement Procedures

Act, 12 U.S.C. §§ 2601 et seq. (“RESPA”), the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq.
(“TILA”), and the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”).
(Id.).

Mr. Yocum also sought a declaratory judgment that he has a right to undisturbed

possession of the subject property (the “Property”) and asserted a state law claim to quiet title
against Nationstar and Renasant pursuant to Ala. Code § 6-6-560 et seq. (Id.).
On January 15, 2016, the undersigned entered a report recommending all claims be
dismissed without prejudice and that Plaintiff be permitted to file a final complaint “satisfactorily
address[ing] the deficiencies” in his FAC. (Doc. 33 at 21). After objections were received, U.S.
District Judge Madeline Haikala entered a memorandum opinion and order. (Doc. 39). The
order adopted the findings and recommendations in the report, with the exception that Mr.
Yocum’s quiet title action was found to state a claim upon which relief could be granted against
Renasant Bank. (Id. at 5-6).
While Plaintiff objected to the undersigned’s recommendation that he be limited to one
final amendment, the court overruled his objection and found that “[g]iven Mr. Yocum’s
extensive litigation in Yocum v. BAC Home Loans Servicing LP, 2:10-cv-02574-AKK and the
bankruptcy actions, [] and his previous amendment in this action, justice and Federal Rule of
Civil Procedure 15(a)(2) do not require more than one additional opportunity to amend.” (Id. at
12). The court dismissed without prejudice the remaining claims in Mr. Yocum’s complaint,
stating, “Mr. Yocum may replead those claims in accordance with the guidance provided in the
magistrate judge’s report and recommendation and this memorandum opinion and order.” (Id.).
2. Second Amended Complaint
On October 11, 2016, Plaintiff, through counsel, filed a second amended complaint (the
“SAC”). (Doc. 51). In the SAC, which consists of 213 pages, Plaintiff added several parties and
claims, contrary to the instructions of the report and recommendation and the district judge’s
2

memorandum opinion and order. Specifically, Plaintiff added defendants Bank of America,
N.A.; Sirote & Permutt, PC; Ginny Rutledge; and Andy Saag. He also added various claims,
including claims under sections of the FDCPA which had not been raised in the FAC.1 In a
report and recommendation entered following a hearing held with the parties, the undersigned
expressed the view that the SAC went well beyond the scope permitted by the district judge’s
memorandum opinion and order. (Doc. 64). The undersigned recommended the SAC be struck
to the extent it exceeded the court’s instructions and that only those claims asserted in the FAC,
as repleaded in the second amended complaint, be permitted to proceed. (Id. at 2). The report
and recommendation as to the SAC remains pending.
B. Plaintiff’s False Allegations And Related Facts
1. Plaintiff’s statements and omissions in the instant case
In the SAC, Plaintiff alleges he “has superior title to the subject real property in fee
simple title, by virtue of a Statutory Warranty Deed granted to him by Patricia Morris Yocum on
November 7, 2000…” (Doc. 51 at 3).2 This deed was granted to Plaintiff by virtue of a final
divorce judgment recorded in Jefferson County on November 15, 2000. (Id. at 4). No party
disputes this transfer occurred and was valid.
Plaintiff further alleges he executed a mortgage and note in favor of Renasant Bank in
2005.

(Id.).

Following several transfers of the mortgage, which Plaintiff contends were

fraudulent or otherwise defective, Nationstar eventually became involved as a servicer of the
note. (See, e.g., Doc. 51 at 24-27). Yocum’s remaining allegations and claims are directed at the
conduct of the defendants, including the individual attorney defendants, as they corresponded
1

While the first amended complaint stated only claims under § 1692g(b), the SAC added claims
under §§ 1692e(10) and 1692e(13).
2

Plaintiff has made similar allegations elsewhere in this case and in other venues. That history is
detailed below.
3

with Plaintiff and took other actions toward foreclosing on the mortgage and forcing a sale of the
Property.

Generally speaking, Plaintiff alleges the defendants’ representations in their

correspondence and legal process were false, misleading, or fraudulent because they
misrepresented the defendants’ status and interest in the debt and the Property or because they
failed to follow the proper procedures in seeking to enforce whatever interest they rightfully had.
These allegations are offered in support of Plaintiff’s FDCPA, RESPA, and TILA claims; his
quiet title and declaratory judgment claims seek to have the court establish Plaintiff’s ownership
of the Property.
In its motion for sanctions, Nationstar asserts Plaintiff conveyed the Property in fee
simple to the 3417 Danner Circle Trust (the “Danner Circle Trust”) by executing a statutory
warranty deed on March 24, 2010. (Doc. 68-1 at 1). The mailing address for the Danner Circle
Trust is listed on the statutory warranty deed as “PMB 364, 1919 Oxmoor Road, Birmingham,
AL 35209.” (Id. at 2). The statutory warranty deed was recorded in Jefferson County on March
25, 2010. (Id. at 3).
On May 5, 2010, Plaintiff executed a quitclaim deed, conveying any remaining interest in
the Property from Plaintiff to the Danner Circle Trust. (Doc. 68-1 at 4). The quitclaim deed lists
the Danner Circle Trust’s address as 3417 Danner Circle, Birmingham, AL 35243. (Id.). This
deed describes the trust as a “private contract trust” and identifies the trustee as Cynthia G.
Beeckman. (Id.). No further details about the nature of the trust or its terms are listed. (Id.).
The quitclaim deed includes language which purports to “remove[]/release[]/discharge[]” the
“Mortgagee(s), Successor Mortgagee(s), Substituted Mortgagee, Agent(s), Servicer(s),
Assign(s), Transfer(s), known and unknown.” (Id. at 5). This language specifically mentions
Renasant Bank, Bank of America, N.A., Capital South Bank, Iberia Bank, and MERS. (Id.).
The quitclaim deed was recorded in Jefferson County on May 6, 2010. (Id. at 4).
4

Plaintiff did not disclose these facts in his pleadings. At the time the motion for sanctions
was filed, there had been no further conveyances of the Property since 2010, and it appeared the
Trust was still the owner of the Property. (Doc. 68 at 7). Nevertheless, Plaintiff stated in his
initial verified complaint that he “was and is the owner of the property” and he had never sold or
intended to irrevocably grant or convey the Property to any party. (Doc. 1-1 at ¶¶ 7, 13-14).
Yocum made identical allegations as to his ownership of the Property in the FAC. (Doc. 5).
Because the documents creating the Danner Circle Trust are not before the court, the
undersigned cannot evaluate whether Plaintiff could be considered the owner of the property.
However, it is clear from the conveyance by statutory warranty deed, and later by quitclaim
deed, that Plaintiff did intend to convey the Property to another party – i.e., the Danner Circle
Trust or its trustee, Cynthia Beeckman.
In light of the district judge’s order that he would be permitted one final opportunity to
amend, Plaintiff was granted several extensions of time to obtain counsel and amend his
complaint. (Docs. 43, 47, 49). On October 11, 2016, Plaintiff filed the SAC and alleged the
same facts regarding ownership and conveyance of the Property as he made in the initial
complaint and FAC. Specifically, he stated:
Plaintiff, is at all times herein mentioned the owner and/or entitled to possession
of the property located at 3417 Danner Circle, Birmingham, AL 35243… Plaintiff
is, and has been, in continuous possession of the Property. … Plaintiff does not
have a landlord-tenant relationship with any person. Plaintiff has never sold the
Property, and has never intended to irrevocably grant or convey the
Property to any party.
(Doc. 51 at 198) (emphasis added). Plaintiff also stated the following:
The Plaintiff herein claims he has superior title to the subject real property in fee
simple title, by virtue of a Statutory Warranty Deed granted to him by Patricia
Morris Yocum on November 7, 2000 ….
(Doc. 51 at 3).
5

2. Plaintiff’s statements and omissions in other litigation
As Nationstar points out in its motion for sanctions, Plaintiff has made similar statements
about the Property in the course of litigation in other venues.3 Shortly following the 2010
conveyances to the Danner Circle Trust, Plaintiff filed for bankruptcy in the Northern District of
Alabama (“Bankruptcy I”). In re: James Albert Yocum, Jr., No. 10-04284-BGC-13 (Bankr. N.D.
Ala. filed Jul. 15, 2010). On July 30, 2010, Plaintiff filed a schedule in which he listed the
Property as his homestead and stated his interest in it was worth $400,000. Bankruptcy I at Doc.
23, p. 3; see also (Doc. 68-4). In his statement of financial affairs filed the same day, Plaintiff
stated he had made no “other transfers” besides those listed, which did not include the transfers
of the Property. (Doc. 68-4 at 20). He stated he had not transferred any other property “either
absolutely or as security within two years immediately preceding” the commencement of the
2010 bankruptcy case. (Id.). Notably, in that same section, Plaintiff further stated he had not
transferred any property within the last ten years to any “self-settled trust or similar device of
which [he] is a beneficiary.” (Id.).
Approximately two months after filing Bankruptcy I, Plaintiff, proceeding pro se, filed a
civil action in this court (“Yocum I”), centered on the same Property at issue here. Yocum v. BAC
Home Loans Servicing, LP, 2:10-cv-02574-AKK (N.D. Ala. filed September 22, 2010). On
March 9, 2011, another judge in this district struck Plaintiff’s amended complaint4 and warned

3

The undersigned takes judicial notice of the public records of related actions in this district and
in the Circuit Court of Jefferson County, Alabama. See Fed. R. Evid. 201(b)(2) (“The court may
judicially notice a fact that is not subject to reasonable dispute because it … can be accurately
and readily determined from sources whose accuracy cannot reasonably be questioned.”);
Nguyen v. United States, 556 F.3d 1244, 1259 n.7 (11th Cir. 2009) (federal court may take
judicial notice of its own records); Davis v. Self, 547 Fed. App’x 927, 929-30 (11th Cir. 2013)
(holding district court properly considered state court records in ruling on motion).
4

Notably, Plaintiff identified himself as “the legal and equitable owner” of the Property. Yocum
I at Doc. 12.
6

him about his failure to comply with the rules of pleading. Id. at Doc. 13. He was specifically
admonished to pay heed to Rule 11’s standard regarding factual allegations. Id. at 5.
In 2011, Plaintiff filed for Chapter 13 bankruptcy again (“Bankruptcy II”). In re: James
Albert Yocum, Jr., No. 11-01997-BGC-13 (Bankr. N.D. Ala. filed Apr. 8, 2011). On April 8,
2011, Plaintiff filed a Schedule A in which he stated, as he had done in Bankruptcy I, that his
interest in the Property was valued at $400,000. Id. at Doc. 2, p. 3; see also (Doc. 68-5).
In 2012, Plaintiff filed for Chapter 13 bankruptcy (“Bankruptcy III”). In re: James Albert
Yocum, Jr., No. 12-00008-BGC-7 (Bankr. N.D. Ala. filed Jan. 3, 2012).5 Plaintiff made similar
statements in this petition as he made in his previous bankruptcy filings. (Doc. 68-6). On March
20, 2013, Bankruptcy III was closed without discharge upon the court’s finding that Plaintiff had
“concealed records, if there were any, from which his financial condition could be ascertained.”
Bankruptcy III at Doc. 64, p. 14 (emphasis original).
In April 2014, ten days after filing the instant case, Plaintiff again filed for Chapter 13
bankruptcy (“Bankruptcy IV”). In re: James Albert Yocum, Jr., No. 14-01659-TOM-13 (Bankr.
N.D. Ala. filed Apr. 28, 2014).6 Plaintiff failed to file the required schedules upon initiating his
2014 bankruptcy case. Id. at Doc. 10. A hearing was held, and the case was dismissed in light
of Plaintiff’s failure to appear at the hearing, file the required schedules, and respond to the
court’s order to show cause and the findings of the court in Bankruptcy III. Id. at Doc. 20-1.
Additionally, Plaintiff was barred from filing any bankruptcy case for twelve months. Id.

5

Plaintiff’s 2012 bankruptcy case was converted from Chapter 13 to Chapter 7 on Plaintiff’s
motion. Bankruptcy III at Doc. 64, p. 2.
6

On April 18, 2014, Plaintiff filed the instant case in the Circuit Court of Jefferson County,
Alabama. Yocum v. Nationstar Mortgage, LLC, No. 01-CV-2014-000287 (Jefferson Cty. Cir.
Ct. filed Apr. 18, 2014). Plaintiff’s initial complaint stated he “was and is” the owner of the
Property, had never sold it, and never intended to irrevocably grant or convey it to any other
party. (Doc. 1-1 at ¶¶ 7, 13-14).
7

On January 23, 2017, Plaintiff filed another civil action in the Circuit Court of Jefferson
County, Alabama (“Yocum III”).7 Yocum v. Nationstar, No. 01-CV-2017-900272 (Jefferson Cty.
Cir. Ct. filed Jan. 23, 2017). Through counsel, Plaintiff moved for a temporary restraining order
on April 4, 2017. Id. at Doc. 29. Attached to the motion, Plaintiff filed an affidavit in which he
attests he owns the Property by virtue of the 2000 statutory warranty deed conveying it from
Patricia Yocum to Plaintiff. Id. at Doc. 31; see also (Doc. 68-10). On May 26, 2017, Nationstar
and other defendants filed a motion for sanctions in Yocum III. Yocum III at Doc. 53. On
August 10, 2017, Plaintiff’s counsel moved to withdraw from Yocum III. Id. at Doc. 96. The
court entered an order granting the motion to withdraw on August 17, 2017, and it appears
Plaintiff is proceeding pro se. Id. at Doc. 101. The motion for sanctions remains pending as of
the date of this report and recommendation and is scheduled for a hearing on August 25, 2017.
Also pending is the defendants’ motion to solicit testimony and inspect documents at the hearing.
Id. at Doc. 99.
II.

STANDARD OF REVIEW
Rule 11 of the Federal Rules of Civil Procedure imposes standards for representations to

the court and provides in pertinent part:
Representations to the Court. By presenting a pleading . . . an attorney or
unrepresented party certifies that to the best of the person’s knowledge,
information, and belief, formed after an inquiry reasonable under the
circumstances:
(1)
(2)
(3)

it is not being presented for any improper purpose, such as
to . . . cause unnecessary delay . . .;
the claims, defenses, and other legal contentions are
warranted by existing law . . .;
the factual contentions have evidentiary support or, if
specifically so identified, will likely have evidentiary

7

Although not expressly referred to in this report as “Yocum II,” the current federal matter is chronologically
Plaintiff’s second civil action, whereas Yocum III is his third.

8

(4)

support after a reasonable opportunity for further
investigation or discovery; and
the denials of factual contentions are warranted on the
evidence . . ..

Fed. R. Civ. P. 11(b). With regard to sanctions, Rule 11 provides the following in
pertinent part:
In General. If, after notice and a reasonable opportunity to respond, the court
determines that Rule 11(b) has been violated, the court may impose an
appropriate sanction on any attorney, law firm, or party that violated the rule or is
responsible for the violation.
Fed. R. Civ. P. 11(c).
The goal of Rule 11 sanctions is to ‘reduce frivolous claims, defenses, or motions, and to
deter costly meritless maneuvers.’” Massengale v. Ray, 267 F.3d 1298, 1301-02 (11th Cir. 2001)
(quoting Donaldson v. Clark, 819 F.2d 1551, 1556 (11th Cir. 1987) (en banc)). “[T]he selection
of the type of sanction to be imposed lies within the district court’s sound discretion.”
Donaldson, 819 F.3d at 1557. Courts are to impose a sanction which is “limited to what suffices
to deter repetition of the conduct or comparable conduct by others similarly situated.” Fed. R.
Civ. P. 11(c)(4). When the court imposes a sanction under Rule 11, it must enter an order
describing the sanctioned conduct and explaining the basis for the sanction. Fed. R. Civ. P.
11(c)(6).

Finally, “[a]lthough pro se pleadings are held to a less stringent standard than

pleadings drafted by attorneys, a plaintiff’s pro se status will not excuse mistakes regarding
procedural rules.” Redmon v. Lake Cty. Sheriff’s Office, 414 Fed. App’x 221, 225-26 (11th Cir.
2011) (citing McNeil v. United States, 508 U.S. 106, 113 (1993)).
Beyond the powers conferred by Rule 11, the court also retains inherent power to impose
sanctions.

This inherent power includes the striking of frivolous pleadings or defenses,

disciplining attorneys, punishing contempt, assessing attorneys’ fees and costs, and “outright
dismissal of a lawsuit.” Allapattah Serv., Inc., v. Exxon Corp., 372 F. Supp. 1344, 1373 (S.D.
9

Fla. 2005) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 43-45 (1991)). The court’s inherent
power must be exercised with restraint and discretion. Chambers, 501 U.S. at 44.
Although outright dismissal is a “particularly severe sanction,” it is nevertheless within
the court’s discretion. Id. at 45. Dismissal is appropriate as a sanction where the sanctioned
party has lied to the court. See, e.g., Vargas v. Peltz, 901 F. Supp. 1572, 1581-82 (S.D. Fla.
1995) (dismissing plaintiff’s sexual harassment suit when it was revealed plaintiff had fabricated
evidence and lied at deposition); Peerless Indus. Paint Coatings Co. v. Canam Steel Corp., 979
F.2d 685, 687 (8th Cir. 1992) (per curiam) (“Fraud on the court is grounds for dismissal with
prejudice.”).

Put another way, dismissal is appropriate where lesser sanctions would be

ineffective. Chemtall, Inc. v. Citi-Chem, Inc., 992 F. Supp. 1390, 1410 (S.D. Ga. 1998) (finding
defendant had engaged in abusive conduct, including lying under oath, and a lesser sanction
would not suffice).
III.

ANALYSIS
Plaintiff responds to the motion with three arguments: (1) the misrepresentations

Nationstar has identified were not intentional and, therefore, cannot support Rule 11 sanctions,
certainly not dismissal; (2) Plaintiff’s claims are brought pursuant to the mortgage contract,
which confers a right to sue to dispute default, acceleration, or foreclosure, so there is no
material difference between him and the trust for purposes of standing; and (3) he is entitled to
amend his claims to reflect that the trust is the true owner of the property, and by doing so, all
problems presented by his misrepresentations will be resolved. (Doc. 72).
As explained below, the undersigned finds Plaintiff’s misrepresentations of fact were
intentional and recommends dismissal on that basis.

The undersigned also recommends

dismissal because further amendments would be required for Plaintiff to proceed but are

10

nevertheless prohibited by a previous order, which should not be altered under the
circumstances.
A. Sanctions
The undersigned finds Plaintiff’s pleadings contain contentions that are not only without
evidentiary support but are in direct contradiction to the circumstances as he knew them to be
when he filed his complaints in this action. Specifically, the court finds Plaintiff intentionally
conveyed the Property to an express trust by executing the March 24, 2010 statutory warranty
deed and the May 5, 2010 quitclaim deed. Both of these conveyances were signed by Plaintiff
personally, a fact he does not deny.8 Therefore, while the exact nature and terms of the trust are
unknown to the undersigned, Plaintiff’s statements cannot be read as true, or even possibly true.
Here, Plaintiff has repeatedly misrepresented, both while proceeding pro se and with the
assistance of counsel, that his ownership interest in the Property is by virtue of the deed executed
to him by Patricia Yocum in 2000. See (Doc. 1-1 at 3-4; Doc. 5 at 3-4; Doc. 51 at 3-4).
Specifically, in the SAC, Plaintiff, knowing the allegation to be baseless, stated:
The Plaintiff herein claims he has superior title to the subject real property in fee
simple title, by virtue of a Statutory Warranty Deed granted to him by
Patricia Morris Yocum on November 7, 2000 ….
(Doc. 51 at 3) (emphasis added). Again, Plaintiff had already conveyed the Property in fee
simple. Whatever interest or title Plaintiff could conceivably have retained in the Property was
not “by virtue of” the deed granted to him by Patricia Yocum in 2000. Plaintiff further asserted:
Plaintiff, is at all times herein mentioned the owner and/or entitled to possession
of the property located at 3417 Danner Circle, Birmingham, AL 35243… Plaintiff
is, and has been, in continuous possession of the Property. … Plaintiff does not
have a landlord-tenant relationship with any person. Plaintiff has never sold the
Property, and has never intended to irrevocably grant or convey the
Property to any party.
8

The undersigned also notes Nationstar’s allegation that the notary who signed Plaintiff’s deeds
in 2010 was subsequently convicted of tax fraud. (Doc. 73 at 2 n.1).
11

(Id. 51 at 198) (emphasis added). However, Plaintiff clearly intended to “irrevocably grant or
convey the Property” when he granted and conveyed fee simple title to the Danner Circle Trust
on March 24, 2017, and recorded the conveyance on March 25, 2017.
Even if the undersigned were willing to believe Plaintiff, at the time he filed this action,
had forgotten two conveyances made four years earlier, it is inconceivable he had forgotten those
transfers at the time he made similar statements to the bankruptcy court. Likewise, it is not
plausible Plaintiff’s declarations to the bankruptcy court were inadvertent. First, Plaintiff stated
to the bankruptcy court in July 2010 that he owned an interest in the Property worth $400,000
and there had been no transfers of the Property within two years of his bankruptcy filing.
Bankruptcy I at Doc. 23. Plaintiff made these false statements a mere four months after he had,
in fact, transferred the property9.

Plaintiff repeated these misrepresentations in two of his

subsequent bankruptcy cases. See Bankruptcy II at Doc. 2, Bankruptcy III at Doc. 21.
Further, Plaintiff had knowledge of Rule 11’s obligation to exercise reasonable diligence
in investigating the evidentiary basis for his factual allegations and the legal basis for the relief
he has requested. In general, any litigant is responsible for being aware of the requirements of
the Rules of Civil Procedure. Fed. R. Civ. P. 1 (scope of the Rules is they govern the procedure

9

Plaintiff also stated he had not transferred any property within the last ten years to any “selfsettled trust or similar device of which [he was] a beneficiary.” Bankruptcy I at Doc. 23.It
appears exceedingly likely that the Danner Circle Trust is a self-settled trust of which Plaintiff is
a beneficiary. This is because one of the deeds refers to the Danner Circle Trust as a “private
contract trust.” (Doc. 68-1 at 4). The undersigned has been unable to find any specific definition
of a “private contract trust.” However, trusts are “express” when they arise at law from an
executed document, such as a contract, as opposed to a “resulting” or “constructive” trust which
arises at equity by declaration of the court. Thus, Plaintiff’s deeds conveying the Property to the
Danner Circle Trust appear to describe an express trust. Because the name of the trust is the
street address of the Property, there is little room for doubt it was intended that the Property be
the sole asset of the trust and Mr. Yocum would be the beneficiary. If this is true, Plaintiff’s
denial of a transfer to a “self-settled trust or similar device of which [he was] a beneficiary” is
false as well.
12

in all civil actions and proceedings in the United States District Courts); Fed. R. Civ. P. 11(a)-(b)
(every pleading, written motion, and other paper must be signed by attorney or party, and by
presenting a pleading, motion, or other paper the presenter certifies compliance with Rule 11).
On that basis, Plaintiff is presumed to be familiar with the requirements of the Rules. Further,
another judge sitting in this court has previously instructed Plaintiff—in an action closely related
to this one—on the provisions of Rule 11 relating to factual allegations. Yocum I at Doc. 13.
Finally, Plaintiff himself has explicitly referenced the duty to exercise reasonable diligence in
verifying factual assertions. In the FAC filed in this case, he stated:
Plaintiff has not had adequate time to exercise reasonable diligence to identify all
persons mentioned in Alabama Code – Section 6-6-[561] who ‘shall’ be named as
defendants. Therefore, Plaintiff intends to amend this Complaint after the
opportunity to exercise reasonable diligence.
(Doc. 5 at ¶ 30). Taken together, these facts make clear Plaintiff is, and was at the time of filing
this matter, fully aware of the standards and obligations which apply to his litigation.
The undersigned has taken care to consider the distinction between misstatements of fact
made in good faith, as opposed to those which are not. Runfola & Assocs., Inc. v. Spectrum
Reporting II, Inc., 88 F.3d 368, 373-74 (6th Cir. 1996) (The “gravaman of Rule 11 [is not in] the
filing of the claim that eventually turns out to be meritless, but rather the persistence in pursuing
that claim after the pleader has or should have become aware of its lack of merit.”); cf.
Blackburn v. Calhoun, 2008 WL 850191 (N.D. Ala. Mar. 4, 2008) (though Rule 11 sanctions
were not warranted when facts were accepted as true under Rule 12(b)(6) review, evidence
collected during discovery might well support sanctions by revealing that basis for suit was
improper and plaintiff knew factual claims were baseless when the suit was filed).
Other circumstances suggest Plaintiff acted intentionally in making his false allegations.
For example, it now appears Plaintiff has caused several additional transfers of the Property. On
13

June 14, 2017, the Danner Circle Trust conveyed the Property to the “N.I.G.D. Trust,” which
then conveyed the Property to an entity called Grand View Financial, LLC, on June 30, 2017.
(Doc. 73 at 2-3). Grand View Financial, LLC, appears to have then taken out a $50,000
mortgage on the Property from an entity called Sharp Financial, LLC, which immediately
declared bankruptcy in the Central District of California on July 5, 2017. (Id. at 3). When Sharp
Financial, LLC, declared bankruptcy, it obtained an automatic stay of proceedings and stymied a
scheduled foreclosure sale of the Property on July 5, 2017. (Id.). All of this has taken place
since the motion for sanctions was filed in this case.
While the assistance of counsel has made no difference in Plaintiff’s misrepresentations,
the undersigned is unable to determine whether counsel was complicit in Plaintiff’s false
statements or simply failed to investigate the facts of the case and the allegations of the pleadings
he signed. Nonetheless, the court finds Plaintiff’s characterization, through counsel, that the
state court in Yocum III “refused to impose sanctions,” is misleading at best. (Doc. 72 at 2, n.2).
In its oral statements during a hearing on June 26, 2017, as well as in a subsequent written order,
the state court merely declined to rule on the motion until further information was available.
(Doc. 73-4 at 6). Thus, its recent actions cannot reasonably be considered a refusal to impose
sanctions. Moreover, Plaintiff’s counsel did not take any action to correct the pleadings after Mr.
Yocum’s true interest in the Property was communicated to him by Nationstar’s counsel; it was
not until the undersigned ordered Plaintiff to respond to the motion for sanctions that counsel
addressed the issues. (See Doc. 68-3 (letter to Plaintiff’s counsel dated May 12, 2017); Doc. 72
at 1, n.1).
Because Plaintiff’s false statements go directly to the ownership of the Property and his
identity as the proper party in interest, there is no doubt his conduct relates to a pivotal issue in

14

the case, and sanction is warranted. Indeed, the need for sanction is heightened where the
conduct relates to a pivotal issue in the case. See, e.g., Vargas, 901 F. Supp. at 1581-82.
For the reasons stated above, the undersigned concludes Plaintiff, despite his insistence to
the contrary, has knowingly, intentionally, and repeatedly misrepresented material facts to the
court. See Universe Antiques, Inc. v. Vareika, 826 F. Supp. 2d 595, 610-11 (S.D.N.Y. Nov. 10,
2011) (concluding that, notwithstanding plaintiff’s insistence that false statements were
inadvertent mistakes, the circumstances of his statements and the facts surrounding them made
clear he was intentionally misrepresenting facts to the court). Based on Plaintiff’s actions in this
matter alone, dismissal is an appropriate sanction. Additionally, Plaintiff’s recurrent efforts to
take advantage of the legal system, often simultaneously and in multiple venues, based on the
same material misrepresentations, demonstrate a complete and callous disregard for the
consequences of his tactics, both in terms of the resources expended by other parties and the
court and in the integrity of the judicial forum as a vehicle for resolving legitimate disputes.
Plaintiff’s conduct in this case and others evidences total disrespect for the effects of his
dishonesty. Therefore, dismissal is warranted to prevent Plaintiff from consuming any more
resources in the instant case and as a deterrent to Plaintiff himself and others who are inclined to
approach this and other courts with similar bad faith.
Rule 11 permits an order directing payment to the movant of “part or all of the reasonable
attorney’s fees and other expenses directly resulting from the violation.”

Fed. R. Civ. P.

11(c)(4). Payment of fees and costs should only be imposed on motion and where they are
“warranted for effective deterrence.” Id. Nationstar has specifically requested attorney fees and
costs, as well as dismissal of this case. (Doc. 68 at 12). The undersigned finds Plaintiff has
knowingly been in violation of Rule 11 from the outset of this lawsuit and his violation has
continued up to the present. Accordingly, in addition to recommending this action be dismissed
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with prejudice pursuant to the court’s inherent power, the undersigned recommends the court
retain jurisdiction to determine if an additional sanction is warranted for effective deterrence and,
if so, the extent to which Nationstar’s costs “directly resulted” from Plaintiff’s Rule 11 violation.
See EEOC v. American Automobile Assoc., 1976 WL 13288 (S.D. Fla. 1976) (dismissing case
without prejudice and taxing costs and attorney fees against the plaintiff as a sanction); In re:
Robinson, 198 B.R. 1017 (N.D. Ga. 1996) (imposing fees and expenses in addition to dismissing
case and barring debtor from refiling any petition for 180 days); Aguiar v. Natbony, 2011 WL
4387180 (S.D. Fla. 2011) (awarding costs and fees to the defendant as a prevailing party after
plaintiff’s claims were struck as a sanction); Petrano v. Old Republic Nat. Title Ins. Co., 2013
WL 1325030 (N.D. Fla. 2013) (granting dismissal with prejudice pursuant to the court’s inherent
authority to sanction and retaining jurisdiction for the imposition of costs and fees as a further
sanction).
B. Further Amendment Of The Complaint
Plaintiff suggests in his response to the motion for sanctions that further amendment
could cure any defects created by his false statements. The undersigned concludes this is not so.
1. Further amendments prohibited by court order
First, the court has disallowed any further amendments.
arbitrary limitation.

This was not a casual or

Instead, the court noted Plaintiff’s claims were already tenuous but

permitted “one, final amendment.” The court did not grant leave to amend as Plaintiff saw fit,
and the court did not grant leave for Plaintiff to correct as-yet-uncontemplated deficiencies in his
complaint. To the contrary, the scope of leave to amend was limited to claims Plaintiff had

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already attempted to state in his initial complaint and FAC, to address the deficiencies which the
court had spelled out.10
2. Rules 17 and 19
Even if Plaintiff were permitted to further amend his complaint to correct the false
allegations discussed above, these are not the only amendments which would be required. First,
as to many of Plaintiff’s claims, it appears the trustee of the Danner Circle Trust may be the real
party in interest under Rule 17. If so, the trustee would have to be added as a party to this action.
Regardless, the trustee is likely an indispensable party who must be joined pursuant to Rule 19.
Rule 17 states the following:
Designation in General. An action must be prosecuted in the name of the real
party in interest. The following may sue in their own names without joining the
person for whose benefit the action is brought: (A) an executor; (B) an
administrator; (C) a guardian; (D) a bailee; (E) a trustee of an express trust; (F) a
party with whom or in whose name a contract has been made for another’s
benefit; and (G) a party authorized by statute.
Fed. R. Civ. P. 17(a)(1).
In general, the real party in interest is the person holding title to the claim or property
involved, as opposed to persons who may be interested in or may benefit from the litigation in
some way. See Elk Grove Unified School Dist. v. Newdow, 542 U.S. 1, 12 (2004) (holding that
“prudential” standing rules such as Rule 17 encompass, among other things, the general
prohibition on a litigant raising another person’s legal rights). The document creating the
Danner Circle Trust is not in the record, so the undersigned cannot determine whether the trustee
is the real party in interest here.

10

However, the general rule in Alabama is that when an

This is why, when Plaintiff filed an SAC which added numerous claims and parties, the
undersigned entered a report recommending all of the extraneously pleaded claims and parties be
struck. The court had already severely restricted Plaintiff’s latitude to further amend his
complaint, and he violated the court’s instructions as to amendments before the issue of his false
statements was ever raised.
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“individual grantor places his property in an active trust, the grantor’s legal title to that property
passes to the trustee.” Ex Parte Callan Assoc., Inc., 87 So. 3d 1161, 1166-67 (Ala. 2011). The
trustee has title to the trust property and has all powers necessary to make the trust productive
and safe; indeed, “the right to sue in the ordinary case vests in the trustee as a representative.”
Id.; see also FBO David Sweet IRA v. Taylor, 4 F. Supp. 3d 1282, 1284-85 (M.D. Ala. Mar. 19,
2014). This general rule is reflected in Rule 17(a)(1)(E), which provides for a trustee of an
express trust to be sued in his or her own name without naming the beneficiary. Notably, the
reverse is not permitted. Fed. R. Civ. P. 17(a)(1).
Further, the trustee of the Danner Circle Trust is almost certainly an indispensable party
who must be joined pursuant to Rule 19. “Generally speaking, the trustee is an indispensable
party…” Rudd v. Branch Banking & Trust Co., 2016 WL 7209727 (N.D. Ala. Aug. 8, 2016)
(citing Drath v. Armstrong, 141 So. 634, 637 (Ala. 1932) (both trustee and beneficiary are
necessary parties to an action seeking to establish respective interests)). Here, the undersigned
has reason to believe Plaintiff is the beneficiary of the Danner Circle Trust (or at least a
beneficiary) since he has apparently been allowed to live at the Property for which the Trust was
named. If Plaintiff is not the beneficiary, then both the beneficiary and the trustee would have to
be joined in order for this action to proceed. In either case, this action cannot proceed without
joining the trustee, thus, introducing an entirely new party. In sum, it is not just that the
Plaintiff’s false statements violate the rules of court. They are also misrepresentations which
cannot be corrected without fundamentally altering the character of the litigation. This action
cannot proceed with James Yocum, Jr., as the sole plaintiff.
Whether the trustee would have the ability to pursue Plaintiff’s TILA, RESPA, and
FDCPA claims is something the undersigned declines to consider, given the level of speculation
which would be required to arrive at an answer. For the same reason, Plaintiff’s contention that
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the mortgage contract confers a right to sue is also beside the point. (Doc. 72 at 2). Although
Plaintiff contends in his SAC that the mortgage contract requires him to assert his quiet title
action (Doc. 51 at 24), Plaintiff has never grounded his claims in contractual standing before.
Rather, he has asserted them based on his status as the Property’s legal and equitable titleholder.
Plaintiff was afforded several opportunities to correctly assert claims he had standing to bring.
This case is before the court to determine whether Plaintiff should be allowed to continue
pursuing the claims he has already asserted, not for the purpose of determining what claims
Plaintiff might have brought had he chosen to pursue his legal rights honestly.
The undersigned finds that even if Plaintiff were allowed to amend his misrepresentations
and identify the true nature of his legal and/or equitable interest in the Property, Plaintiff could
not proceed in compliance with Rules 17 and 19. The undersigned has concluded Plaintiff knew
of the defects in his allegations. Although he was granted limited leave to correct his pleadings,
he made no effort to do so with regard to the statements which have now been revealed as false,
and there is no basis for the court to conclude he ever would have done so. To allow Plaintiff to
further amend his complaint would undermine all parties’ respect for the obligation of litigants to
follow the court’s orders and the rules of procedure. Accordingly, Plaintiff’s motion for leave to
amend is denied, and his claims are due to be dismissed because they are no longer supported by
the pleadings.
IV.

CONCLUSION
For the reasons explained above, the undersigned finds Plaintiff has knowingly and

intentionally made false representations of material fact to the court. By doing so, he has
violated Rule 11 of the Federal Rules of Civil Procedure. The nature and circumstances of
Plaintiff’s violations warrant dismissal. Moreover, this action cannot proceed without additional
amendments which are prohibited by previous order of the court; if they were permitted, such
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amendments would result in unnecessary and unjustifiable expenditures for the adverse parties
and the court. Accordingly, the undersigned RECOMMENDS this action be dismissed with
prejudice. The undersigned further RECOMMENDS the court retain jurisdiction to determine
whether costs, including attorneys’ fees and expenses, should be taxed to Plaintiff James A.
Yocum, Jr.
V.

NOTICE OF RIGHT TO OBJECT
Pursuant to 28 U.S.C. § 636(b)(1)(C) and Rule 72(b)(2) of the Federal Rules of Civil

Procedure, any party may file specific written objections to this report and recommendation
within fourteen (14) days from the date it is filed in the office of the Clerk. Failure to file written
objections to the proposed findings and recommendations contained in this report and
recommendation within fourteen (14) days from the date it is filed shall bar an aggrieved party
from attacking the factual findings on appeal, except for plain error. Written objections shall
specifically identify the portions of the proposed findings and recommendation to which
objection is made and the specific basis for objection. A copy of the objections must be served
upon all other parties to the action.
DONE this 24th day of August, 2017.

______________________________
STACI G. CORNELIUS
U.S. MAGISTRATE JUDGE

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