Sims et al v. New Penn Financial LLC

Filing 6

OPINION AND ORDER: DENYING 2 MOTION for Temporary Restraining Order MOTION for Preliminary Injunction filed by Mario L Sims, Tiffiny Sims. Signed by Judge Jon E DeGuilio on 7/1/15. (cc: M. Sims, T. Sims) (jld)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
MARIO L. SIMS and TIFFINY SIMS
Plaintiffs,
v.
NEW PENN FINANCIAL LLC dba
SHELLPOINT MORTGAGE SERVICING
Defendant.

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Case No. 3:15-CV-263 JD

OPINION AND ORDER
Plaintiffs Mario Sims and Tiffiny Sims filed a pro se complaint against Defendant New
Penn Financial, LLC, which services the mortgage on a home located at 23778 Grove Street,
South Bend Indiana (the House), where the Simses live. [DE 1]. The Complaint was
accompanied by an “Application for Temporary Restraining Order and Preliminary Injunction,”
which seeks to enjoin the July 23, 2015 sheriff’s sale of that House. [DE 2]. Due to the presence
of a petition for a temporary restraining order, this case has been temporarily assigned to the
undersigned, consistent with the Court’s General Order 2014-7. Service of the petition for a
temporary restraining order does not yet appear to have been made on the Defendant and the
Defendant has not appeared. Having reviewed the materials filed by the Simses, the Court
DENIES the petition for a temporary restraining order [DE 2] for the reasons stated below.

BACKGROUND
The Plaintiffs purchased the House from John Tiffany, an Indiana-licensed realtor, in
November 2008. [DE 2 at 1]. Tiffany owned the House, but it was subject to a mortgage (the
Mortgage) owned by The Bank of New York (now known as The Bank of New York Mellon).

[DE 2 at 2.] This arrangement was contemplated by the Contract for Sale of Real Estate (the
Contract) between the Plaintiffs and Tiffany, which permitted the Seller to obtain a mortgage on
the House. [DE 2-1 at 5]. But Tiffany did not apply the money he received from the Simses
under the Contract to the Mortgage, and the bank initiated proceedings to foreclose on the
House. [DE 2 at 2].
Consequently, the Simses filed a complaint against Tiffany with the Indiana Attorney
General, which led to proceedings before the Indiana Real Estate Commission. The Commission
found (by way of a settlement agreement) that Tiffany had committed various professional
conduct violations, including “engaging in fraud or material deception in the course of
professional services or activities by accepting monthly payments on the land contract from Sims
and failing to apply those payments to Respondent’s mortgage amount.” [DE 2-1 at 23].
The Simses also reached an agreement with Tiffany and Resurgent Mortgage Servicing
(which serviced the Mortgage until 2014, when the Defendant became the servicer) to allow the
Simses to apply to assume the mortgage on the House. [DE 2 at 2]. To further that process,
Tiffany’s attorney drafted a letter to the Mortgage servicer indicating Tiffany’s support for the
Simses’ assumption of the Mortgage. [DE 2-1 at 13]. Tiffany also provided the Simses with a
quitclaim deed to the House. [DE 2-1 at 11].
But when the Simses attempted to assume the Mortgage from Tiffany, they encountered
considerable difficulty. Despite submitting all documentation requested by the Defendant1 on
three occasions, they were unable to complete the mortgage assumption process. [DE 2 at 3].
When they tried to call the Defendant to work through these problems, they ran into a wall of

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It appears that at least some of the conduct that is the subject of Plaintiffs’ complaint was committed by Resurgent
Mortgage Servicing, not the Defendant. The Plaintiffs have not addressed the relationship between these two
entities, or if the Defendant is liable for any or all of Resurgent’s past conduct with regard to the Mortgage.

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unreturned calls, hang-ups and dead-end transfers. [DE 2 at 2-4]. Consequently, the Plaintiffs
filed two complaints against the Defendant with the Consumer Financial Protection Bureau. The
Defendant responded to the first complaint by contesting the Plaintiffs’ assertion that they had
provided all documentation required to process the assumption. [DE 2 at 3]. It responded to the
second complaint by indicating that the Mortgage was delinquent, and that the Defendant does
not allow the assumption of delinquent mortgages. [DE 2 at 4]. The Simses then filed this case.
It asserts nine claims, all apparently resulting from the Defendant’s handling of the Simses’
attempt to assume the Mortgage. [DE 1].
To date, the Simses have been unable to assume the Mortgage, and the House is slated for
sale at a Sheriff’s auction on July 23, 2015. [DE 2 at 1]. The Plaintiffs now request a TRO
barring that sale.

DISCUSSION
A. Subject Matter Jurisdiction
While the Simses’ complaint asserts that the Court has diversity jurisdiction over this
matter, it does not allege the citizenship of any party. Where, as here, a party is a limited
liability company (LLC), the citizenship of the LLC is the citizenship of each of its members.
Camico Mut. Ins. Co. v. Citizens Bank, 474 F.3d 989, 992 (7th Cir. 2007). So, the Plaintiffs’
complaint ought to allege both the members of the Defendant LLC and the state(s) of their
citizenship. It alleges neither. Nor does the complaint allege the citizenship of the Plaintiffs,
which is not equivalent to their residency. See Id. So, the Court cannot conclude that it has
diversity jurisdiction over this action based on the facts pled.

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Nevertheless, one of the Plaintiffs’ claims arises under a federal law: the Fair Debt
Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. Accordingly, the Plaintiffs’
complaint raises a question of federal law, and jurisdiction is proper under 28 U.S.C. § 1331.
Furthermore, Plaintiffs’ FDCPA claim and its other claims appear to be part of a common case
or controversy, as they all arise from the Defendant’s refusal to permit the Simses to assume the
Mortgage. Accordingly, this Court has supplemental jurisdiction over the non-FDCPA claims in
this case. Hansen v. Bd. of Trustees of Hamilton Se. Sch. Corp., 551 F.3d 599, 608 (7th Cir.
2008). With subject matter jurisdiction aside, the Court turns to the merits of the Plaintiffs’
petition for a temporary restraining order and preliminary injunction.
B. Plaintiffs’ Petition for a Temporary Restraining Order and Preliminary Injunction
The standard for determining whether a temporary restraining order is appropriate is
analogous to the standard applicable when determining whether preliminary injunctive relief is
appropriate. See YourNetDating, Inc. v. Mitchell, 88 F. Supp. 2d 870, 871 (N.D. Ill. 2000). The
party seeking the temporary restraining order bears the burden of showing that it is “reasonably
likely to succeed on the merits[,] is suffering irreparable harm that outweighs any harm the
nonmoving party will suffer if the injunction is granted, there is no adequate remedy at law, and
an injunction would not harm the public interest.” Joelner v. Vill. of Wash. Park, 378 F.3d 613,
619 (7th Cir. 2004) (stating the standard for a preliminary injunction). If Plaintiffs meet this
threshold, the court “weighs the factors against one another in a sliding scale analysis . . . to
determine whether the balance of harms weighs in favor of the moving party or whether the
nonmoving party or public interest will be harmed sufficiently that the injunction should be
denied.” Christian Legal Society v. Walker, 453 F.3d 853, 859 (7th Cir. 2006).

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The Court does not find that this standard has been met in this case. First, the Simses do
not appear likely to succeed on the merits. Their complaint asserts a hodgepodge of different
causes of action, which suffer from a variety of defects. The first claim (fraud) is not pled with
particularity as required by Federal Rule of Civil Procedure 9(b). The second claim (breach of
settlement agreement) asserts that the Defendant breached a settlement agreement, but does not
attach or otherwise clearly outline any agreement to which the Defendant is a party. The third
claim (breach of the implied covenant of good faith), fourth claim (negligence) and seventh
claim (negligent or intentional infliction of emotional distress) are not clearly pled, and appear
unsupported by the Plaintiffs’ factual allegations. The fifth claim (violation of the Indiana
Deceptive Consumer Sales Act), sixth claim (knowing and intentional violation of the Indiana
Deceptive Consumer Sales Act) and eighth claim (violation of the FDCPA) do not outline how
the Indiana Deceptive Consumer Sales Act and the Fair Debt Collection Practices Act apply to
Plaintiffs do not appear to be acting as debtors in this context. Finally, the ninth claim (violation
of the right to privacy) is vague, and to the extent it asserts a violation of the Fourth Amendment,
does not appear to implicate a state actor.
Next, it appears that issuance of a temporary restraining order is barred by the RookerFeldman doctrine. The Rooker-Feldman doctrine precludes federal district courts from
exercising jurisdiction over “cases brought by state-court losers complaining of injuries caused
by state-court judgments rendered before the district court proceedings commenced and inviting
district court review and rejection of those judgments.” Exxon-Mobil Corp. v. Saudi Basic Indus.
Corp., 544 U.S. 280, 284 (2005).
Although the Plaintiffs do not devote significant discussion to the state foreclosure
proceedings in this matter, the evidence that they attach shows that a sheriff’s sale has been
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scheduled for July 23, 2015. [DE 2-1 at 51]. Under Indiana law, a sheriff’s sale is only
scheduled after the entry of a “judgment of foreclosure.” See Ind. Code §§ 32-30-10-5; 32-30-108. The Plaintiffs’ suit in this Court, at least as far as it attempts to enjoin the sheriff’s sale, is an
attempt to relitigate the merits of the underlying foreclosure action. This Court lacks the
jurisdiction to do so. See Mack v. Am. Nat. Bank of Beaver Dam, No. 10-cv-557, 2010 WL
4365526, at *2–3 (W.D. Wis. Oct. 27, 2010) (denying temporary restraining order in similar case
on Rooker-Feldman grounds).
Finally, Federal Rule of Civil Procedure 65(b)(1)(B) requires that—before a temporary
restraining order may issue without written or oral notice to the adverse party—“the movant’s
attorney certifies in writing any efforts made to give notice and the reasons why it should not be
required.” Although this rule applies on its face to attorneys only, courts across the country have
held pro se litigants who seek a temporary restraining order to the same requirement. See, e.g.,
Duncan v. Quinn, No. 14-CV-01167-MJR, 2014 WL 5543961, at *2 (S.D. Ill. Nov. 3, 2014);
Lescs v. Berkeley Cnty. Sheriffs Office, No. 3:14-cv-96, 2014 WL 4802057, at *2 (N.D. W. Va.
Sept. 23, 2014); Science Sys. & Apps., Inc. v. United States, No. PWG-14-2212, 2014 WL
3672908, at *3 (D. Md. July 22, 2014).
Here there is no indication that the Defendant has been notified of the Plaintiff’s petition
for a temporary restraining order. The Plaintiffs’ petition attaches a signed statement of proof of
service. [DE 2 at 8]. However, this statement—which indicates that the Plaintiffs served the
Defendant with the complaint and summons in this matter—was filed before the clerk entered
the summons on the docket. [DE 2 at 8; DE 3]. Furthermore, it does not indicate that the
Plaintiffs provided the Defendants with notice of their petition, that the Plaintiffs made any
efforts to give such notice, or why such notice should not be required. Thus, the Plaintiffs’
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request for a temporary restraining order does not comply with Rule 65(b)(1)(B), further
justifying denial of the petition on the current record.
The Court is sympathetic to the circumstances faced by the Plaintiffs. However, the
standards for issuance of a temporary restraining order have not been met here. Accordingly, the
“Application for Temporary Restraining Order and Preliminary Injunction” [DE 2] is DENIED.
SO ORDERED.
ENTERED: July 1, 2015

/s/ JON E. DEGUILIO
Judge
United States District Court

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