Cox et al v. Bank of America Corporation et al
Filing
28
OPINION AND ORDER that the Clerk of Court is DIRECTED to remove Jerusalem Trust and Moynihan as parties to this action. IT IS FURTHER ORDERED that Plaintiffs' Motion to Dismiss Magistrate Judge's Final Report and Recommendation 24 and Mo tion for Void Judgment and to Set Aside Order 25 , which the Court construed as their Objections to the R&R, are OVERRULED. IT IS FURTHER ORDERED that Magistrate Judge Alan J. Baverman's Final Report and Recommendation 22 is ADOPTED. IT IS F URTHER ORDERED that Plaintiffs' Motion to Remand 9 and Motion for Summary Judgment 19 are DENIED. IT IS FURTHER ORDERED that Defendant's Motion to Dismiss 3 is GRANTED. This action is DISMISSED WITH PREJUDICE. Signed by Judge William S. Duffey, Jr on 9/3/2015. (anc)
to Remand [9] and Motion for Summary Judgment [19] be denied. Also before the
Court are Plaintiffs’ “Motion to Dismiss Magistrate Judge’s Final Report and
Recommendation” [24] and “Motion for Void Judgment and to Set Aside Order”
[25], which the Court construes as Plaintiffs’ Objections to the R&R.3
I.
BACKGROUND
On December 12, 2014, Plaintiffs, proceeding pro se, filed their Complaint
in the Superior Court of DeKalb County, Georgia.4 Although largely
incomprehensible, Plaintiffs appear to assert claims for violations of the National
Banking Act, 12 U.S.C. § 24(7), the Civil Rights Attorney’s Fees Awards Act,
42 U.S.C. § 1988, and various state laws, based on perceived defects in the
origination and assignment of their mortgage and in the foreclosure proceedings
initiated by BANA, the successor by merger to Plaintiffs’ original lender,
Countrywide Bank. Plaintiffs seek declaratory and injunctive relief, and damages
in the amount of $732,000. (Compl. at 6).
On January 20, 2015, Defendant removed the DeKalb County Action to this
Court based on federal question and diversity jurisdiction [1].
On January 21, 2015, Defendant filed its Motion to Dismiss.
3
4
Other than having different titles, these two documents are identical.
No. 14CV11873.
2
On February 2, 2015, Plaintiffs filed their “Motion to Dismiss Paul A.
Rogers [sic] Notice of Removal to Federal Court” [9], which the Court construes
as Plaintiffs’ Motion to Remand. Plaintiffs argue that removal was improper
because Rogers, Defendant’s counsel, is an “interloper” and “is attempting to
testify for a witness not in appearance.” (See [9] at 2).
On April 23, 2015, Plaintiffs filed their Motion for Summary Judgment, in
which “Plaintiffs objects [sic] to all [ ] Rogers trespassing herein and all his
unverified actions by and through McGuire Woods LLP.” (See [19] at 4).
On May 28, 2015, the Magistrate Judge issued his R&R. Having found that
Plaintiffs and Defendant are citizens of different states, and that the amount in
controversy exceeds $75,000, the Magistrate Judge concluded that the Court has
subject matter jurisdiction based on diversity of citizenship, and recommended that
Plaintiffs’ Motion to Remand be denied. The Magistrate Judge also found that
Plaintiffs’ Motion for Summary Judgment is meritless because it merely reiterates
Plaintiffs’ objections to Rogers’ participation in this action and the pleadings he
filed on Defendant’s behalf, and recommended that it be denied. Finally, the
Magistrate Judge found that Plaintiffs failed to state a claim for relief under any
viable legal theory, and recommended that Defendant’s Motion to Dismiss be
granted, and that the Court deny Plaintiffs leave to amend their Complaint.
3
On June 11, 2015, Plaintiffs filed their “Objections” to the R&R.
II.
DISCUSSION
A.
Legal Standard for Review of a Magistrate Judge’s R&R
After conducting a careful and complete review of the findings and
recommendations, a district judge may accept, reject, or modify a magistrate
judge’s report and recommendation. 28 U.S.C. § 636(b)(1);
Williams v. Wainwright, 681 F.2d 732 (11th Cir. 1982), cert. denied,
459 U.S. 1112 (1983). A district judge “shall make a de novo determination of
those portions of the report or specified proposed findings or recommendations to
which objection is made.” 28 U.S.C. § 636(b)(1). With respect to those findings
and recommendations to which objections have not been asserted, the Court must
conduct a plain error review of the record. United States v. Slay, 714 F.2d 1093,
1095 (11th Cir. 1983), cert. denied, 464 U.S. 1050 (1984).
Plaintiffs’ Objections are illogical, convoluted and incoherent. They do not
address the Magistrate Judge’s reasons for recommending dismissal of their
Complaint or denial of their Motions, and instead consist of rambling allegations
that are nearly impossible to discern.5 See Marsden v. Moore, 847 F.2d 1536,
5
For example, Plaintiffs assert that “BANK OF AMERICA CORPORATION
BANK, is misrepresented, fraud, void on its face, unverified, irrelevant and
inadmissible,” and they “object[ ] to the use of LEGALESE [sic] in the above
4
1548 (11th Cir. 1988) (“Parties filing objections to a magistrate’s report and
recommendation must specifically identify those findings objected to. Frivolous,
conclusive, or general objections need not be considered by the district court.”).
These are not valid objections and the Court will not consider them. The Court
thus reviews the R&R for plain error.6
B.
Plaintiffs’ Motion to Remand
Plaintiffs conclusorily assert that the Court lacks “subject matter
jurisdiction” and that removal was improper because Rogers, Defendant’s counsel,
is an “interloper” and “is attempting to testify for a witness not in appearance.”
(See [9] at 2). The Court agrees with the Magistrate Judge’s finding that this is not
a proper basis for remand. The Magistrate Judge found further that complete
diversity exists among the parties because Plaintiffs are citizens of Georgia and
BANA is a citizen of North Carolina, and that the amount-in-controversy
requirement is satisfied because Plaintiffs request damages in the amount of
styled action with the grounds for the objection which is [sic] the Plaintiff(s) herein
are not school [sic] in law and request the Court’s indulgence.” (Obj. [24] at 33,
41). The Court notes that every other page of Plaintiffs’ 68-page “Motion to
Dismiss Magistrate Judge’s Final Report and Recommendation” states “Pay to the
order of UNITED STATES, without recourse,” and is signed by Stephen Cox,
“pursuant to 12 USC 95(a)2 [sic].”
6
Even if Plaintiffs’ Objections were cognizable, and had the Court conducted
a de novo review, the Court would have reached the same conclusions as the
Magistrate Judge.
5
$732,000. The Magistrate Judge concluded that the Court has subject matter
jurisdiction based on diversity of citizenship. The Magistrate Judge recommended
that Plaintiffs’ Motion to Remand be denied, and the Court finds no plain error in
this recommendation. See 28 U.S.C. § 1441(a) (“any civil action brought in a
State court of which the district courts of the United States have original
jurisdiction, may be removed by the defendant”); 28 U.S.C. § 1332(a) (authorizing
federal jurisdiction over suits between citizens of different states where the amount
in controversy exceeds $75,000).
C.
Defendant’s Motion to Dismiss
1.
Legal Standard
On a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure, the Court must “assume that the factual allegations in the
complaint are true and give the plaintiff[] the benefit of reasonable factual
inferences.” Wooten v. Quicken Loans, Inc., 626 F.3d 1187, 1196 (11th Cir.
2010). Although reasonable inferences are made in the plaintiff’s favor,
“‘unwarranted deductions of fact’ are not admitted as true.” Aldana v. Del Monte
Fresh Produce, N.A., 416 F.3d 1242, 1248 (11th Cir. 2005) (quoting S. Fla. Water
Mgmt. Dist. v. Montalvo, 84 F.3d 402, 408 n.10 (1996)). Similarly, the Court is
not required to accept conclusory allegations and legal conclusions as true. See
6
Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)
(construing Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007)).
“To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570)). Mere “labels and
conclusions” are insufficient. Twombly, 550 U.S. at 555. “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). This requires more than
the “mere possibility of misconduct.” Am. Dental, 605 F.3d at 1290 (quoting
Iqbal, 556 U.S. at 679). The well-pled allegations must “nudge[] their claims
across the line from conceivable to plausible.” Id. at 1289 (quoting Twombly, 550
U.S. at 570).7
Complaints filed pro se are to be liberally construed and are “held to less
stringent standards than formal pleadings drafted by lawyers.” Erickson v. Pardus,
7
Federal Rule of Civil Procedure 8(a)(2) requires the plaintiff to state “a short
and plain statement of the claim showing that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2). In Twombly, the Supreme Court recognized the liberal
minimal standards imposed by Federal Rule 8(a)(2) but also acknowledged that
“[f]actual allegations must be enough to raise a right to relief above the speculative
level . . . .” Twombly, 550 U.S. at 555.
7
551 U.S. 89, 94 (2007) (citations and internal quotation marks omitted).
Nevertheless, a pro se plaintiff must comply with the threshold requirements of the
Federal Rules of Civil Procedure. “Even though a pro se complaint should be
construed liberally, a pro se complaint still must state a claim upon which the
Court can grant relief.” Grigsby v. Thomas, 506 F. Supp. 2d 26, 28 (D.D.C. 2007).
“[A] district court does not have license to rewrite a deficient pleading.”
Osahar v. U.S. Postal Serv., 297 F. App’x 863, 864 (11th Cir. 2008).
2.
Analysis
Plaintiffs claim that they were not loaned any money, so they do not owe a
debt. They therefore assert that they have not defaulted on their mortgage and
cannot be foreclosed upon. Magistrate Judge Baverman found that relief cannot be
granted on this theory because a promissory note is a promise to make payments,
not an actual payment. Magistrate Judge Baverman recommended that Plaintiffs’
claims, including for violation of the National Bank Act, 12 U.S.C. § 24(7), based
on this “vapor money” theory be dismissed pursuant to Rule 12(b)(6), and the
Court finds no plain error in this recommendation. See Thomas v. Countrywide
Home Loans, No. 2:09-cv-82, 2010 WL 1328644, at *2 (N.D. Ga. Mar. 29, 2010)
(collecting cases rejecting “vapor credit” theories); Yeboah v. Bank of New York
Mellon, No. 1:12-cv-2139, 2012 WL 4759246, at *5 (N.D. Ga. Aug. 30, 2012)
8
(“Plaintiff’s argument is commonly known as the ‘vapor money’ theory or a ‘no
money lent’ claim. Such claims ‘fail as a matter of law.’”) (King, M.J.) adopted at
2012 WL 4759242 (N.D. Ga. Oct. 5, 2012) (Thrash, J.).8
Magistrate Judge Baverman found that, because they are proceeding pro se,
Plaintiffs are not entitled to attorneys’ fees. Magistrate Judge Baverman
recommended that Plaintiffs’ claim for attorneys fees under 42 U.S.C. § 1988 be
dismissed pursuant to Rule 12(b)(6), and the Court finds no plain error in this
recommendation. See Kay v. Ehrler, 499 U.S. 432, 438 (1991).
Magistrate Judge Baverman found further that, to the extent Plaintiffs assert
that their mortgage was improperly securitized, that an unspecified assignment of
their mortgage was “suspicious,” and that BANA cannot foreclose on their
property because it has not produced the original promissory note, relief cannot be
granted on these claims because they are not cognizable under Georgia law.
Magistrate Judge Baverman recommended that these claims be dismissed pursuant
to Rule 12(b)(6), and the Court finds no plain error in this recommendation. See,
8
The Court also agrees with the Magistrate Judge’s finding that there is no
private cause of action for violation of the National Bank Act. See Thompson v.
St. Nicholas Nat’l Bank, 146 U.S. 240, 251 (1892) (“[W]here the provisions of the
national banking act prohibit certain acts by banks or their officers, without
imposing any penalty or forfeiture applicable to particular transactions which have
been executed, their validity can be questioned only by the United States, and not
by private parties.”).
9
e.g., Searcy v. EMC Mortg. Corp., No. 1:10-cv-0965, 2010 Dist. LEXIS 119975, at
*2 (N.D. Ga. Sept. 30, 2010) (“While it may well be that Plaintiff’s mortgage was
pooled with other loans into a securitized trust that then issued bonds to investors,
that fact would not have any effect on Plaintiff’s rights and obligations with respect
to the mortgage loan, and it certainly would not absolve Plaintiff from having to
make loan payments or somehow shield Plaintiff’s property from foreclosure.”);
Montgomery v. Bank of Am., 740 S.E.2d 434, 436 (Ga. Ct. App. 2013) (because
assignment of security deed was contractual, plaintiff lacked standing to contest its
validity because he was not a party to the assignment); You v. JP Morgan Chase
Bank, 743 S.E. 2d 428, 433 (Ga. 2013) (“Under Georgia law, the holder of a deed
to secure debt is authorized to exercise the power of sale in accordance with the
terms of the deed even if it does not also hold the note or otherwise have any
beneficial interest in the debt obligation underlying the deed.”).9
9
The Court also agrees with the Magistrate Judge that it does not appear, and
Plaintiffs do not assert, that they are current on their loan obligations, and Plaintiffs
are not entitled to enjoin foreclosure and cannot state a claim for wrongful
foreclosure for this additional reason. See Smith v. Citizens & S. Fin. Corp.,
268 S.E.2d 157 (Ga. 1980) (“Appellants have made no tender of the indebtedness
secured by the deed to secure debt and thus are not entitled to set aside the sale
under power.”); Harvey v. Deutsche Bank Nat’l Trust Co., No. 1:12-cv-1612, 2012
WL 3516477, at *2 (N.D. Ga. Aug. 14, 2012) (“When the borrower cannot show
that the alleged injury is attributable to the lender’s acts or omissions, the borrower
has no claim for wrongful foreclosure.”); Heritage Creek Dev. Corp. v. Colonial
Bank, 601 S.E. 2d 842 (Ga. Ct. App. 2004) (plaintiff’s injury was “solely
10
Magistrate Judge Baverman concluded that Plaintiffs’ filings throughout this
action “give the Court little hope that given the chance they would file a viable
complaint.” (R&R at 21). The Court agrees and finds that amendment of
Plaintiffs’ Complaint would be futile. Plaintiffs’ Complaint is based on
indisputably meritless legal theories, and Plaintiffs have not, and cannot, assert a
viable claim based on perceived defects in the origination or assignment of their
mortgage, or in the foreclosure proceedings initiated by BANA. Plaintiffs’ claims
are dismissed with prejudice. See Taylor v. McSwain, 335 F. App’x 32, 33
(11th Cir. 2009) (per curiam) (courts should not dismiss a pro se plaintiff’s
complaint with prejudice “without first giving the plaintiff an opportunity to amend
the complaint if a more carefully drafted complaint might state a claim.”); Burger
King Corp. v. Weaver, 169 F.3d 1310, 1320 (11th Cir. 1999) (“[D]enial of leave to
amend is justified by futility when the complaint as amended is still subject to
dismissal.”); Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1255 (11th Cir. 2008)
(“Because justice does not require district courts to waste their time on hopeless
cases, leave may be denied if a proposed amendment fails to correct the
deficiencies in the original complaint or otherwise fails to state a claim.”).
attributable to its own acts or omissions both before and after the foreclosure”
because it defaulted on its loan payments, failed to cure default, and did not bid on
property at foreclosure sale).
11
Having found that Plaintiffs’ claims are required to be dismissed, Plaintiffs’
Motion for Summary Judgment is now moot. Even if it were not moot, the
Magistrate Judge found that Plaintiffs’ Motion for Summary Judgment is meritless
and not a proper motion for summary judgment because it merely reiterates their
general objections to Rogers’s participation in this action and his ability to file
motions on Defendant’s behalf. The Magistrate Judge recommended that
Plaintiffs’ Motion for Summary Judgment be denied, and the Court finds no plain
error in this recommendation. See Fed. R. Civ. P. 56(a) (summary judgment is
proper when the is no genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986) (A fact is “material” if it “might affect the outcome of
the suit under the governing law.”).
III.
CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that the Clerk of Court is DIRECTED to
remove Jerusalem Trust and Moynihan as parties to this action.
IT IS FURTHER ORDERED that Plaintiffs’ “Motion to Dismiss
Magistrate Judge’s Final Report and Recommendation” [24] and “Motion for Void
12
Judgment and to Set Aside Order” [25], which the Court construed as their
Objections to the R&R, are OVERRULED.
IT IS FURTHER ORDERED that Magistrate Judge Alan J. Baverman’s
Final Report and Recommendation [22] is ADOPTED.
IT IS FURTHER ORDERED that Plaintiffs’ Motion to Remand [9] and
Motion for Summary Judgment [19] are DENIED.
IT IS FURTHER ORDERED that Defendant’s Motion to Dismiss [3] is
GRANTED. This action is DISMISSED WITH PREJUDICE.
SO ORDERED this 3rd day of September, 2015.
_______________________________
WILLIAM S. DUFFEY, JR.
UNITED STATES DISTRICT JUDGE
13
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?