Smith et al v. HSBC Bank USA, National Association et al

Filing 95

ORDER denying 85 Motion for Reconsideration re 70 Order on Motion to Stay; denying 87 Motion for Reconsideration 84 Order on Motions to Dismiss, Order on Motion for Reconsideration, Order on Motion for Miscellaneous Relief, Order on Motion to Stay, Order on Motion to Amend/Correct, Order on Motion to Strike. Signed by Judge Lisa G. Wood on 2/5/2018. (ca)

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MARVIN B. SMITH, III & SHARON
H. SMITH,

Plaintiffs,
vs.

2:15-CV-70

HSBC BANK USA, N.A.; WELLS
FARGO BANK, N.A.; S. ANDREW
SHUPING, JR.; SHUPING, MORSE &
ROSS LLP; RUBIN LUBLIN, LLC;
BRET CHANESS; and PETER LUBLIN,
Defendants.

ORDER

Before

the

Court

are

two

Motions for

Reconsideration

from

Plaintiffs Marvin B. Smith, III and Sharon H. Smith: the first

asking the Court to reconsider its Order on Motion to Stay (Dkt.
No. 85), and the second asking the Court to reconsider its Order
on the Motion to

Dismiss, the Motion for Reconsideration, the

Motion for Miscellaneous Relief, the Motion to Stay, the Motion
to Amend/Correct, and the Motion to Strike
the

reasons

set

forth

Reconsideration are DENIED.

A0 72A

(Rev. 8/82)

below.

{Dkt. No. 87). For

Plaintiffs'

Motions

for

FACTUAL BACKGROUND

For

over

a

decade,

the

Smiths

have

been

involved

in

a

bankruptcy case. In re Smith, No. 07-20244 (Bankr. S.D. Ga. Apr.
2,

2007). On

August

8,

2017,

Plaintiffs

moved

to enforce

a

bankruptcy stay they claim prevented HSBC from foreclosing on
the Property and evicting Plaintiffs. Dkt. No. 69. That same

day,

the

Court

found

that

HSBC

had

not

violated

any

such

bankruptcy stay because a Consent Order entered in Plaintiffs'
bankruptcy permitted HSBC to foreclose and evict Plaintiffs from
the Property. Dkt. No. 70.

Thereafter,

on

September

1,

2017,

the

Court

dismissed

Plaintiffs' federal claims. Dkt. No. 84 p. 14. The Court found

that Plaintiffs' claims of fraud upon the Court were meritless,

because

the

Bankruptcy

Court

had

rejected

these

contentions

''half a decade ago." Dkt. No. 84 p. 9. The Court likewise found
that

the

Plaintiffs

contention

had

was

bound

previously

by

made

res

judiciata

because

(1)

this

argument

before

the

Bankruptcy Court, and the argument was rejected, and (2) to the
extent any additional evidence now exists that Plaintiffs could
have

brought

before

the

Bankruptcy

Court in

support

of

this

claim, res judicata barred any claims or new evidence Plaintiffs
could have brought before the Bankruptcy Court. Id. The Court
likewise dismissed Plaintiffs' claim under the federal Fair Debt

Collection Practices Act. Id. at 10. Lastly, the Court found:

(1) that Plaintiffs' constitutional claims were meritless, and
(2) Plaintiffs' federal RICO claim was due to be dismissed. In

the Order, the Court found that ''[a]11 other outstanding motions
are DENIED as moot." I^ at 14.

On the same day the Court entered its dismissal. Plaintiff
entered

a

Motion

for

Reconsideration

asking

for

the

Court's

reconsideration of its Order on the Motion to Stay. Dkt. No. 85.

On September 5, 2017, Plaintiffs submitted another Motion for
Reconsideration: this time of the Court's Order dismissing the
case. Dkt. No. 87.
LEGAL STANDARD

[R]econsideration of an earlier order is an extraordinary
remedy, which should be granted sparingly." Whitesell Corp. v.
Electolux Home Prods., Inc., 2010 WL 4025943, at *7 (S.D. Ga.

2010). In

order

to

grant

such

a

motion,

^Mt]here

must

be

a

reason why a court should reconsider its prior decision, and the
moving

party

convincing

must

nature

decision." Mehta

set

to
v.

forth

induce

Foskey,

facts

the

2013

or

court
WL

law

to

1808764,

of

a

amend
at

*1

strongly

its

prior

(S.D.

Ga.

2013). Reconsideration is only appropriate if the moving party
demonstrates: (1) an intervening change in controlling law, (2)

the availability of new

evidence, or (3) the need to correct

clear error or prevent manifest injustice. Estate of Pidcock By
and Through Pidcock v. Sunnyland Am., Inc., 726 F. Supp. 1322,

1333

(S.D.

Ga.

1989).

reconsideration

rests

Any

decision

within

the

to

grant

sound

a

motion

discretion

for

of

the

district court. Fla. Ass'n of Rehab. Facilities, Inc. v. State
of

Fla.

Dep't of Health

&

Rehab

Servs., 225 F.3d

1208, 1216

(11th Cir. 2000).

A

motion

for

reconsideration

is

not

properly

used

as

a

vehicle '^to present the court with arguments already heard and
dismissed or to repackage familiar arguments to test whether the

court will change its mind." Bryan v. Murphy, 246 F. Supp. 2d
1256,

1259

(N.D.

Ga.

2003). Nor

do

such

motions

opportunity to instruct the Court on how it
better'

the

first

time."

Pres.

Endangered

present

an

could have done it
Areas

of

Cobb's

History, Inc. v. U.S. Army Corps of Enq'rs, 916 F. Supp. 1557,
1560 (N.D. Ga. 1995).
DISCUSSION

Plaintiffs raise several arguments as to why their Motions
for Reconsideration are due to be granted. The Court examines

each

in

turn,

determining

whether

any

of

the

issues

raised

demonstrate: (1) an intervening change in controlling law, (2)
the availability of new evidence, or (3) the need to correct
clear error or prevent manifest injustice, which would justify
the Court's reconsideration. Estate of Pidcock, 726 F. Supp. at
1333.

I.

Issues

Raised

in

the

Motion

for

Reconsideration

of

the

Order on the Motion to Stay (Dkt. No. 85)
Plaintiffs ask for reconsideration of the Order on the Motion

to Stay on two grounds. Neither ground serves as a basis for the
Court's reconsideration of its prior Order.

A. Whether

Plaintiffs'

mortgage

was

in

the

trust for

which HSBC serves as trustee

First, Plaintiffs argue that their mortgage was not in the
trust for which HSBC serves as trustee. Dkt. No. 85, pp. 3-4.

This contention, however, is incorrect; as the proper assignee

of the Security Deed, HSBC was entitled to seek relief from the
automatic stay via the Consent Order, foreclose on the Property,
and seek Plaintiffs' eviction. Dkt. No. 70.

Moreover, Plaintiffs lack standing to bring such a claim.
In Georgia, ^^a person who is not a party to a contract, or an

intended third-party beneficiary of a contract, lacks standing
to challenge or enforce a contract under Georgia law." Haynes v.
McCalla Raymer, LLC, 793 F.3d 1246, 1251

third

parties

to

the

security

deed.

{11th Cir. 2015). As

Plaintiffs

do

not

have

standing to challenge its assignment. As such. Plaintiffs' first
argument

does

not justify the

Order on the Motion to Stay.

Court's

reconsideration

of the

B. Whether

HSBC

Bank

USA

was

an

authorized

agent

of

Countrywide Home Loans, Inc.

Plaintiffs

authorized

next

agent

argue

and

was

that

not

"HSBC

Bank

relieved

USA

from

was

the

not

stay

an

when

Countrywide Home Loans, Inc. was." Dkt. No. 85, p. 3. Plaintiffs
have made this argument before. And at least twice, the Court
has found

it to

be

untenable.

First,

in

2009, the

Bankruptcy

Court—in an order denying a motion by Plaintiffs to vacate the
Consent Order—remarked on Plaintiffs' argument that

"Countrywide fraudulently misrepresented itself as the real
party in interest, both in its proofs of claim and its
motion for relief from stay. This assertion is wholly
without merit. First, when the Smiths agreed to the Consent

Order, they waived the right to litigate the question of
whether Countrywide is the real party in interest. Second,
misrepresentation alone is not an adequate basis for
relief."

In

re

Smith,

No.

07-20244,

Dkt.

206

(Bankr.

S.D.

Ga.

2009).

Likewise, in denying Plaintiff's original motion to enforce the

automatic

bankruptcy

stay,

this

Court

found

Countrywide

Home

Loans, Inc. was the "Servicing Agent for HSBC Bank USA." Dkt.
No. 70, p. 1.

In

having

reiterating

it

previously
now.

raised

Plaintiffs

this
fail

argument
to

and

identify

simply
(1)

an

intervening change in controlling law, (2) the availability of
new evidence, or (3) the need to correct clear error or prevent

manifest

injustice,

which

would

justify

the

reconsideration. Estate of Pidcock, 726 F. Supp. at 1333.

Court's

Neither

justify

of

Plaintiffs'

reconsideration.

two

As

arguments

such.

is

Plaintiffs'

sufficient

Motion

on

to

for

Reconsideration of the Order on the Motion to Stay (Dkt. No. 85)
is DENIED.

II.

Issues

Raised

in

the

Motion

for

Reconsideration

of

the

Order on the Motion to Dismiss (Dkt. No. 87)

The Court next turns to Plaintiffs' arguments in support of
Reconsideration

of

the

Order

on

the

Motion

to

Dismiss.

Here,

too, none of Plaintiffs' arguments serves as a proper basis for
the Court's reconsideration of its prior Order.

A. Nhether

Plaintiffs'

Mortgage

was

in

the

trust for

which HSBC serves as trustee, and whether Countrywide
Home

Loans,

Inc.

was

properly

in

an

agency

relationship with HSBC
In

their

second

Motion

for

Reconsideration,

Plaintiffs

repeat two of the same arguments raised in their previous Motion
for Reconsideration: that Plaintiffs' mortgage was not in the
trust for

which

HSBC

Home Loans, Inc.
Dkt.

No.

87,

pp.

serves

as trustee,

was not properly in an
3-4.

As

concluded

and

that

Countrywide

agency relationship.

above,

neither

of

these

arguments offers new law, new evidence, or else clear error that
would justify the Court's reconsideration.

B. Aether Res Judicata Applies

Plaintiffs

appear

to

argue

that

res

judicata

does

not

apply, as the ''Eleventh Circuit's substitution of parties and
the

injunction

Defendants."

were

Dkt.

a

No.

result
87,

of

p.

2.

fraud

upon

Plaintiffs

the
have

Court
made

by

this

argument before. Dkt. No. 1-1 at 70-72. And this Court rejected
it before. This Court previously explained that it does indeed

"fail[] due to res judicata.
failed to offer

their

repeated

new

Dkt. No. 84, p. 8. As Plaintiffs

law, evidence, or clear error supporting

argument,

the

argument

does

not

justify

the

Court's reconsideration.

C. Mie'bher Circumvexi'bing a Hearing on the Merits of the
Case is an Offense to Fifth Amendment Due Process

Next, Plaintiffs argue that circumventing a hearing on the
merits of this case would be an offense to Fifth Amendment Due

Process.

Dkt.

No. 87, p. 8. But "[d]ue process does not, of

course, require that the defendant in every civil case actually

have a hearing on the merits." Boddie v. Connecticut, 401 U.S.
371, 378 (1971). The Smiths filed extensive pleadings in this
matter,

and

those

consideration.

(1976)

(due

See

process

have

received

Matthews

is

v.

the

Court's

Eldridge,^

satisfied

when

notice and an opportunity to be heard).

424

the

due

care

and

U.S.

319,

349

litigant

receives

Second, the Smiths argue that this Court previously '^stated
in

its

Order

denying

the

Smiths'

Motion

to

Remand

Under

the

Younger Abstention Doctrine, Dkt. No. 61, that it would consider
the Smiths request to repair pleadings; however, the case was

dismissed

without

any

such

opportunity." Dkt.

No.

87,

p.

8.

Plaintiffs argue that as pro se litigants, they should be given

opportunity to correct their pleadings rather than have their
motions denied if they are deficient. Dkt. No. 87, p. 10.

A party may amend its pleading once as a matter of course
within 21 days after serving it, or, if the pleading is one to
which

a

responsive

pleading

is

required,

21

days

after

the

earlier of service of a responsive pleading or of a motion under
Fed. R. Civ. P. 12(b), (e), or (f). Fed. R. Civ. P. 15(a)(1). A

party may otherwise only amend its pleading with the opposing
party's written consent or the court's leave, and the court's
leave

must

be

freely

given

if

the

underlying

facts

or

circumstances relied upon by a plaintiff may be a proper subject
of relief. See Fed. R. Civ. P. 15(a)(2); Hall v. United Ins. Co.

of Am.^ 367 F.3d 1255, 1262 (11th Cir. 2004). A party ordinarily
must

be

given

at

least

district

court

dismisses

one
the

opportunity

to

complaint.

amend

Corsello

before
v.

the

Lincare,

Inc.^ 428 F.3d 1008, 1014 (11th Cir. 2005).

Certainly,
standard

than

[p]ro se pleadings are held to a less stringent
pleadings

drafted

by

attorneys

and

will.

therefore, be liberally construed." Tannenbaum v. United States,
148 F.3d 1262, 1263 (11th Cir. 1998). But such leniency neither

requires nor allows courts to rewrite an otherwise deficient
pleading

in

order

to

sustain

an

action.

GJR

Invs.,

Inc.

v.

County of Escambia, Fla., 132 F.3d 1359, 1369 (11th Cir. 1998).
A district court need not, moreover, allow an amendment where it

would be futile: that is, where the complaint as amended would

still be subject to dismissal. Hall, 367 F.3d at 1262-63.
Here,
claims

the

were

because

the

Court

due

to

found
be

that

all

dismissed:

foreclosure

sale

of

Plaintiffs'

because

did

not

of

raise

res

federal

judicata,

constitutional

concerns, because resort to RICO would be improper, and because
neither Rublin Lublin

nor Shuping is a ^Mebt collector" under

the FDCPA. See generally Dkt. No. 84. Because all federal claims
were

dismissed,

the

Court

declined

to

exercise

supplemental

jurisdiction over the Smiths' state claims. Dkt. No. 84 p. 14;
see Baggett v. First Nat'1 Bank of Gainesville, 117 F.3d 1342,
1353 (11th

Cir. 1997)

(^'When the

district court has dismissed

all federal claims from a case, there is a strong argument for

declining

to

exercise

supplemental

jurisdiction

over

the

remaining state law claims.").

Even
complaint,

if

Plaintiffs

that

had

complaint

been

would

given

have

leave

remained

to

amend

deficient

their
as

a

matter of law. As such. Plaintiffs' complaint—even as amended—
10

would have been dismissed. The Court was therefore not required

to grant leave to amend the complaint. See Hall/■

367

F.Sd at

1262-63.

D. "Whether

Dismissing

the

Case

as

Frivolous

Would

Constitute an Offense to Due Process

Plaintiffs
frivolous,

Dkt.

No.

such

87,

frivolous;
due

to

p.

argue

dismissal

10.

rather,

be

that

would

the Court

over

their

be

an

case

be
to

offense

dismissed
due

as

process.

But this Court did not dismiss the case as

dismissed,

jurisdiction

should

the

and

found that the federal claims were
refused

state- law

to

exercise

claims.

Dkt.

supplemental

No.

84,

p.

14.

(1)

an

Plaintiff's argument is therefore not applicable.
As

such.

Plaintiffs

intervening change
new evidence,

manifest

or

(3)

of

Estate of Pidcock,
too,

not

in controlling law,

demonstrated

(2)

the

availability of

the need to correct clear error or prevent

injustice,

reconsideration

have

which

its

726

would

Order

F.

on

Supp.

at

justify

the

Motion

1333.

As

the
to

Court's

Dismiss.

such,

See

this Motion,

is due to be DENIED.
CONCLUSION

For

the

Reconsideration
and

of

the

foregoing
of

Order

Reconsideration,

the
on

reasons.

Order
the

on

Plaintiffs'

Motion

Motion

to

to

Stay

Dismiss,

Motions
(Dkt.
the

the Motion for Miscellaneous Relief,
11

No.

Motion

for
85),
for

the Motion

to stay, the Motion to Amend/Correct, and the Motion to Strike
(Dkt. No. 87) are DENIED.

SO ORDERED, this 5th day of February, 2018.

k

HONi^LISA GCTDBE^r WOOD, JUDGE
UNITED STATES DISTRICT COURT
SOUTHERN

AO Ilk

(Rev. 8/82)

12

DISTRICT OF GEORGIA