Jackson v. Bank of America, N.A.

Filing 13

ORDER AND REASONS granting 11 Motion for Judgment on the Pleadings. Signed by Chief Judge Sarah S. Vance on 11/26/2013. (mmm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
WENDY T. JACKSON

CIVIL ACTION

VERSUS

NO: 13-5795

BANK OF AMERICA, N.A.

SECTION: R

ORDER AND REASONS
Defendant moves for judgment on the pleadings on several
grounds.1 The Court GRANTS defendant's motion for three
independent reasons: (1) plaintiff's claims are barred by the
doctrine of res judicata; (2) plaintiff has not stated a claim
upon which relief can be granted; and (3) plaintiff has not pled
her fraud claim with particularity.
I.

BACKGROUND
On November 12, 2002, plaintiff borrowed $82,200 from

Countrywide Home Loans, Inc.2 Plaintiff agreed to repay the loan
via a promissory note that was secured by a mortgage on her home
in Slidell, Louisiana.3 Defendant Bank of America later became
the noteholder after merging with Countrywide. On May 17, 2011,
BOA filed a petition for executory process in Louisiana state

1

R. Doc. 11.

2

R. Doc. 9-3.

3

R. Docs. 9-5, 9-6.

court, alleging that plaintiff had been in default on her loan
since December 1, 2010.4 According to BOA, the court authorized
the issuance of a writ of seizure and sale on May 19, 2011.5
On August 13, 2013, plaintiff filed a petition for damages
against BOA in Louisiana state court.6 The substance of
plaintiff's claim is not entirely clear from her petition. It
appears that, liberally construed, plaintiff's pleadings allege
that defendant defrauded her by loaning her money that it did not
have.7 Because the loan was a sham transaction, plaintiff
contends, she does not have to repay the money, and BOA should
not have foreclosed on her property.8 Plaintiff also vaguely
alleges that BOA defrauded her by not providing her with "'full
disclosure' of all the various aspects of the entire
transaction."9
BOA removed this matter to federal court on September 11,
2013,10 and filed this motion for judgment on the pleadings on

4

R. Doc. 9-8.

5

R. Doc. 11-1 at 2.

6

R. Doc. 11-2.

7

See, e.g., R. Doc. 11-2 at 8 ("Banks lend money they
don't have. Therefore there is no contract. No loan was ever
made." (emphasis deleted)).
8

See, e.g., id. at 11, 16, 24.

9

Id. at 21; see also id. at 25.

10

R. Doc. 1.
2

October 25.11 Plaintiff has not filed a response.

II.

LEGAL STANDARD
A motion for judgment on the pleadings under Federal Rule of

Civil Procedure 12(c) is appropriate if the matter can be
adjudicated by deciding questions of law rather than factual
disputes. Brittan Commc'ns Int'l Corp. v. Sw. Bell Tel. Co., 313
F.3d 899, 904 (5th Cir. 2002). It is subject to the same standard
as a motion to dismiss under Rule 12(b)(6). Doe v. MySpace, Inc.,
528 F.3d 413, 418 (5th Cir. 2008). To survive a Rule 12(b)(6)
motion to dismiss, the plaintiff must plead enough facts "to
state a claim to relief that is plausible on its face." Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially
plausible when the plaintiff pleads facts that allow the court to
"draw the reasonable inference that the defendant is liable for
the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). A court must accept all well-pleaded facts as true and
must draw all reasonable inferences in favor of the plaintiff.
Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 239 (5th Cir. 2009).
But the Court is not bound to accept as true legal conclusions
couched as factual allegations. Iqbal, 556 U.S. at 678.
A legally sufficient complaint must establish more than a
"sheer possibility" that plaintiff's claim is true. Id. It need

11

R. Doc. 11.
3

not contain detailed factual allegations, but it must go beyond
labels, legal conclusions, or formulaic recitations of the
elements of a cause of action. Id. In other words, the face of
the complaint must contain enough factual matter to raise a
reasonable expectation that discovery will reveal evidence of
each element of the plaintiff's claim. Lormand, 565 F.3d at 257.
If there are insufficient factual allegations to raise a right to
relief above the speculative level, or if it is apparent from the
face of the complaint that there is an insuperable bar to relief,
the claim must be dismissed. Twombly, 550 U.S. at 555.
Courts construe pleadings and briefs submitted by pro se
litigants liberally and "apply less stringent standards to
parties proceeding pro se than to parties represented by
counsel." Grant v. Cuellar, 59 F.3d 523, 524 & n.3 (5th Cir.
1995) (per curiam). But a court will not "invent, out of whole
cloth, novel arguments on behalf of a pro se plaintiff in the
absence of meaningful, albeit imperfect, briefing." Jones v.
Alfred, 353 F. App'x 949, 951–52 (5th Cir. 2009).

III. DISCUSSION
A.

Res Judicata
The preclusive effect of a state court judgment in a

subsequent federal lawsuit is determined by the preclusion law of
the state in which the judgment was rendered. Marrese v. Am.

4

Academy of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985); see
also 28 U.S.C. § 1738. Under Louisiana law,
Except as otherwise provided by law, a valid and final
judgment is conclusive between the same parties, except
on appeal or other direct review, to the following
extent:
(1) If the judgment is in favor of the plaintiff, all
causes of action existing at the time of final judgment
arising out of the transaction or occurrence that is the
subject matter of the litigation are extinguished and
merged in the judgment.
La. Rev. Stat. § 13:4231.
Under Louisiana law, an order of seizure and sale is a final
judgment for res judicata purposes. Countrywide Home Loans
Servicing, LP v. Thomas, 113 So.3d 355, 358 (La. Ct. App. 2013).
To dismiss an action on res judicata grounds in this context,
a court must find: (1) the judgment in the executory
process lawsuit is valid; (2) the judgment is final; (3)
the parties are the same; (4) the cause or causes of
action asserted in the present suit existed at the time
of the final judgment; and (5) the cause or causes of
action asserted in the present petition arose out of the
transaction or occurrence that was the subject matter of
the executory process lawsuit.
Id. at 359; accord Avery v. CitiMortgage, Inc., 15 So.3d 240, 243
(La. Ct. App. 2009).
The Court finds that each of the required elements is
present here. Cf. Thomas, 113 So.3d at 359-60. First, it is not
disputed that the order of seizure and sale is valid. Second, the
order is final. Under Louisiana law, a debtor seeking to object
to an executory process proceeding may proceed in only two ways:
(1) filing an injunction to arrest the seizure and sale, or (2)
5

filing a suspensive appeal from the order of seizure and sale.
La. Code Civ. P. art. 2642; see also Antoine v. Chrysler Fin.
Corp., 782 So.2d 651, 652 (La. Ct. App. 2001). Plaintiff has
failed to avail herself of either of these two avenues of
defense; accordingly, she has waived any defenses or procedural
objections to the executory process proceeding. Alphonse v. Arch
Bay Holdings, LLC, No. 12-330, 2013 WL 55911, at *4 (E.D. La.
Jan. 3, 2013); Antoine, 782 So.2d at 652-53; Citizens Bank &
Trust Co. v. Little Ford, Inc., 522 So.2d 1124, 1133-34 (La. Ct.
App. 1988) (collecting cases). Thus, the state court's judgment
is now final.
Third, the parties to both proceedings -- Jackson and BOA -are the same. Fourth, plaintiff's claim that her debt to BOA is
legally unenforceable because BOA committed fraud in the mortgage
transaction was available when BOA filed the petition for
executory process. See La. Code Civ. P. art. 2571 (providing that
the defendant in an executory proceeding may arrest the seizure
and sale of property by injunction if the underlying debt is
"legally unenforceable"); Avery, 15 So.3d at 243. Finally,
plaintiff's cause of action in this case arises out of the same
occurrence as did the executory process proceeding: Jackson's
default on her loan from BOA. Cf. Thomas, 113 So.3d at 360.
In short, the state court's order of seizure and sale,
signed over two years before this lawsuit was filed, is now final

6

and nonappealable. The doctrine of res judicata thus precludes
plaintiff from bringing a claim for damages as a result of the
seizure in this Court. See Antoine, 782 So.2d at 653.

B.

Failure to State a Claim
Even if plaintiff's suit were not barred on res judicata

grounds, the Court would still dismiss it, because plaintiff has
failed to state a claim upon which relief can be granted. As BOA
points out, her petition appears to rest on the theory that a
bank that issues a mortgage loan has "created" money through its
bookkeeping procedures and has not actually transferred anything
of value to the recipient. This theory, which BOA terms the
"vapor money" theory, "has been tried and consistently rejected
in federal courts across the country." Richardson v. Deutsche
Bank Trust Co. Ams., No. 3:08-CV-01857, 2008 WL 5225824, at *7
(M.D. Pa. Dec. 12, 2008) (collecting cases). This Court agrees
with the other courts to have addressed the issue and finds that
the "vapor money" theory is meritless and cannot form the basis
of a valid claim.

C.

Failure to Plead Fraud With Particularity
Finally, even if plaintiff's allegations did not rest on an

unsupportable theoretical foundation, the Court would still grant
defendant's motion, because plaintiff has failed to plead her
fraud claim with particularity. Under Federal Rule of Civil
7

Procedure 9(b), a plaintiff who alleges fraud "must state the
factual basis for the fraudulent claim with particularity and
cannot rely on speculation or conclusional allegations." United
States ex rel. Rafizadeh v. Cont'l Common, Inc., 553 F.3d 869,
873 (5th Cir. 2008). In general, such a statement should include
the "time, place, and contents of the false representation[], as
well as the identity of the person making the misrepresentation
and what that person obtained thereby." United States ex rel.
Grubbs v. Kanneganti, 565 F.3d 180, 186 (5th Cir. 2009)
(alteration in original). Plaintiff's petition contains no such
details; rather, it simply alleges in vague and conclusory terms
that defendant orchestrated a fraudulent transaction and
wrongfully foreclosed on plaintiff's home. Her complaint is thus
fatally deficient under Rule 9(b).

III. CONCLUSION
For the foregoing reasons, the Court GRANTS defendant's
motion for judgment on the pleadings.

New Orleans, Louisiana, this 26th day of November, 2013.
__

_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

8