Allen et al v. LPP et al

Filing 30

ORDER denying 28 Motion for Leave to File; granting in part and denying in part 18 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 20 Motion to Dismiss for Lack of Jurisdiction; granting in part and denying in part 20 Motion to Dismiss for Failure to State a Claim. Signed by Judge Jay C. Zainey. (jrc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
KWAN D. ALLEN & JELINDA GIBSON
ALLEN

CIVIL ACTION

VERSUS

NO: 13-6332

LPP, ET AL.

SECTION: "A" (1)
ORDER

The following motions are before the Court: Motion to Dismiss (Rec. Doc. 18)
filed by defendants LPP Mortgage Ltd., Property Acceptance Corp., MGC Mortgage, Inc., and
Beal's Bank, S.S.B. ("the LPP Movants"); Motion to Dismiss (Rec. Doc. 20) filed by
Shapiro & Daigrepont, LLC and Toni Arnona ("the Shapiro Movants"); Motion for Leave
to File Out of Time Motion to Supplement and Amend Original Petition for a
Second Time (Rec. Doc. 28) filed by pro se Plaintiffs, Kwan D. Allen and Jelinda Gibson
Allen. The motions are before the Court on the briefs without oral argument.
I.

BACKGROUND
Plaintiffs Kwan D. Allen and Jelinda Gibson Allen filed this federal complaint pro se

on November 4, 2013, seeking inter alia to have this Court intervene on their behalf in
ongoing1 state court foreclosure proceedings that certain of the defendants instituted against
them. Plaintiffs complain that LPP/MGC had instituted a foreclosure action in either 2009
or 2010 and ultimately settled the matter with Plaintiffs by entering into a loan modification
agreement. Plaintiffs contend that the note holders had no intention of honoring the
agreement because even though Mr. Allen made several attempts to pay on the debt he was
told by certain defendants not to make any payments. Then sometime in late 2013

It is unclear from the pleadings whether the state court proceedings have concluded in a
final judgment or remain pending.
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Defendants once again initiated foreclosure proceedings in Orleans Parish court. Plaintiffs
complain that Defendants continue to pursue foreclosure relief in state court and that the
attorneys for the note holders have ignored requests by Plaintiffs’ state court counsel to try to
resolve the matter.
Plaintiffs’ complaint in this Court seeks a declaratory judgment to determine the
parties’ respective rights vis à vis the indebtedness and mortgage on the property. Plaintiffs
also seek injunctive relief from this Court asking the Court to enjoin the state court
proceedings. Plaintiffs seek damages, both compensatory and punitive.
Via an Order and Reasons entered on November 21, 2013 (Rec. Doc. 6), the Court
addressed Plaintiffs’ motions for emergency relief. First, the Court assumed without deciding
(solely for the purpose of clarifying that Plaintiffs were not entitled to emergency relief from
a federal court) that it had subject matter jurisdiction over this action.2 Then, the Court
denied Plaintiffs' request for emergency relief, alluding to the state court remedies that

The Court stated:
Plaintiffs are attempting to rely on federal question jurisdiction because they claim
that the foreclosure proceedings against them constitute a violation of their
constitutional rights. Recognizing that pro se pleadings are entitled to a liberal
interpretation, see Champion v. United States, 421 Fed. Appx. 418, 420-21 (5th Cir.
2011) (unpublished (citing Tex. Comptroller of Pub. Accts. v. Liuzza, 610 F.3d 937,
941 n.4 (5th Cir. 2010)), Plaintiffs’ pleadings nonetheless suffer from a lack of any
factual support whatsoever for the contention that any federal right is implicated in
this case. The crux of the complaint is that Defendants have failed to honor the loan
modification agreement from 2010 as evinced by their initiation of the state court
action, but even if Defendants have done so in bad faith or maliciously this conduct
does not violate the federal constitution. Absent federal question jurisdiction, this
Court will be completely without jurisdiction over this lawsuit because the parties are
not completely diverse in citizenship, and the Declaratory Judgment Act, 28 U.S.C.
§ 2201 does not provide an independent basis for subject matter jurisdiction. In re
B-727 Aircraft, 272 F.3d 264, 270 (5th Cir. 2001). And of course, Plaintiffs are surely
going to face a Rooker-Feldman challenge once a final judgment issues in state court
because federal courts have no appellate jurisdiction over state court decisions.
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005) (citing
Rooker v. Fidelity Trust Co., 263 U.S. 413, 416 (1923)).
Rec. Doc. 6; Order and Reasons of 11/20/13 at 2 n.2.
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Plaintiffs should have pursued, and explaining why this Court could not enjoin the state
court proceedings. (Rec. Doc. 6).
The instant motions to dismiss were filed in January of this year. The Court allowed
Plaintiffs several extensions of time to respond to the motions in light of their pro se status
and personal circumstances. Instead of filing oppositions to the motions, Plaintiffs
eventually moved to transfer this matter to state court. (Rec. Doc. 26). The Court denied that
motion, explaining to Plaintiffs that this Court had no procedural vehicle to transfer a
complaint initiated in federal court to a state court. (Rec. Doc. 27). The Court then
postponed the submission date on Defendants' motions once again in order to allow
Plaintiffs additional time to file their oppositions. (Rec. Doc. 28). Notwithstanding that
Defendants' motions, which were filed in January, were continued to June 2014 for hearing
in order to facilitate Plaintiffs in their efforts to oppose the motions, Plaintiffs nonetheless
did not file oppositions to Defendants' motions and moved instead for leave to amend their
complaint. (Rec. Doc. 28).
Via the instant motions the moving defendants seek dismissal of all of Plaintiffs'
claims. The LPP Movants' motion is brought under Rule 12(b)(6) and focuses on the factual
deficiencies in the complaint. The Shapiro Movants' motion raises various Rule 12(b)(6)
challenges as well as a subject matter challenge under Rule 12(b)(1).
II.

DISCUSSION
Before the Court can entertain Defendants' merits challenges under Rule 12(b)(6), or

Plaintiffs' request to amend their complaint, the Court must determine whether it has
subject matter jurisdiction over this action.3 It is incumbent upon federal courts to dismiss

A Rule 12(b)(6) dismissal is one on the merits and with prejudice. See Cox, Cox, Camel
& Wilson, LLC v. Sasol N. Am., Inc., 544 Fed. Appx. 455 (5th Cir. 2013) (unpublished). Therefore,
a federal court must have subject matter jurisdiction over an action before it can dispose of any
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an action whenever it appears that subject matter jurisdiction is lacking, and the Court must
do so sua sponte if the parties have not brought the issue to the attention of the Court.
Marshall v. Gibson's Prods., Inc., 584 F.2d 668, 671-72 (5th Cir. 1978) (citing Mansfield,
Coldwater & Lake Mich. R.R. v. Swan, 111 U.S. 379 (1884)).
Again, the crux of the complaint is that the LPP Movants breached a loan
modification agreement by instituting a foreclosure proceeding rather than accepting
additional payments. See note 2, supra. The claims raised in the complaint are ostensibly
state-law-based. But the Court cannot exercise original jurisdiction pursuant to 28 U.S.C. §
1332(a)(1) (diversity jurisdiction) over state claims because the parties are not completely
diverse in citizenship. The Court must therefore determine whether the complaint alleges
any claims under federal law so that the Court can exercise original federal question
jurisdiction pursuant to 28 U.S.C. § 1331. If federal question jurisdiction exists then the
Court can exercise supplemental jurisdiction over the state causes of action, see 28 U.S.C.
1367(a). But if federal question jurisdiction is lacking, then the entire complaint must be
dismissed for lack of jurisdiction.
It is clear that Plaintiffs were eager to successfully invoke federal question jurisdiction
when they filed this complaint because they had hoped that a federal court would intervene
on their behalf in the state court proceedings. Thus, in the Introduction section of the
Complaint Plaintiffs state that "[t]his is a Federal Civil Rights action brought as a result of
what the Plaintiffs believe to have been a violation of, inter alia, [their] federal civil
constitutional rights . . . ." (Rec. Doc. 4, First Amend. Pet. ¶ 1) (emphasis in original).
Plaintiffs expressly invoke 42 U.S.C. §§ 1981 ("Equal Rights Under the Law"), 1982
claims under Rule 12(b)(6). Id. Further, if the Court lacks jurisdiction over the original
complaint, then Plaintiffs cannot amend to add new claims in order to create jurisdiction. See
Whitmire v. Victus Ltd, 212 F.3d 885 (5th Cir. 2000); In re Katrina Canal Breaches Litig., 342
Fed. Appx. 928, 931 (5th Cir. 2009) (unpublished).
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("Property Rights of Citizens"), 1983 ("Civil Action for Deprivation of Rights"), 1985
("Conspiracy to Interfere With Civil Rights"), & 1986 ("Action for Neglect to Prevent"). (Id.).
In the Jurisdiction section of the Complaint, Plaintiffs refer to the Fourth and Fourteenth
Amendments.4 (Id. ¶ 3).
In light of the facts alleged, any claims grounded on constitutional protections and 42
U.S.C. § 1983 are legally frivolous. To state a claim under § 1983 the plaintiff must allege a
violation of a right secured by the Constitution and laws of the United States, and must show
that the deprivation was committed by a person acting under color of state law. West v.
Atkins, 487 U.S. 42, 48 (1988) (citing Parratt v. Taylor, 451 U.S. 527, 535 (1981)). Not only
is the complaint bereft of any factual allegations to support a violation of a federal right, the
complaint is also completely lacking in any suggestion of state action.
Unlike 42 U.S.C. § 1983, §§ 1981, 1985, and 1986 can apply to private actors. Section
1981 prohibits intentional racial discrimination in the making and enforcing of contracts.
Runyon v. McCrary, 427 U.S. 160, 168 (1976); Oden v. Oktibbeha Cnty., 246 F. 3d 458, 463
(5th Cir. 2001).5 This provision is not implicated under the facts alleged in the complaint,

The following statutory cites are also recited in the Jurisdiction section: 15 U.S.C. §
1681, 12 U.S.C. § 1421, 12 U.S.C. § 1451, and 12 U.S.C. § 3751. None of these citations provide
causes of action, and none of them are specifically alleged in any count in the Complaint.
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42 U.S.C. § 1981, entitled Equal Rights Under the Law, provides:

(a) Statement of equal rights
All persons within the jurisdiction of the United States shall have the
same right in every State and Territory to make and enforce contracts,
to sue, be parties, give evidence, and to the full and equal benefit of
all laws and proceedings for the security of persons and property as
is enjoyed by white citizens, and shall be subject to like punishment,
pains, penalties, taxes, licenses, and exactions of every kind, and to no
other.
(b) “Make and enforce contracts” defined
For purposes of this section, the term “make and enforce contracts” includes
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which lack any suggestion of discriminatory animus.
Plaintiffs do not indicate which section of § 1985 that they rely upon. But § 1985(1)
pertains to conspiracies to prevent a federal officer from discharging his duties, and is
therefore patently inapplicable to this case. 42 U.S.C. § 1985(1); Bryant v. Military Dep't of
Miss., 597 F.3d 678, 687 (5th Cir. 2010).6 Section 1985(2) requires a nexus with a federal
judicial proceeding, which renders this section patently inapplicable. Bradt v. Smith, 634
F.2d 796, 799 (5th Cir. 1981) And §§ 1985(2) & (3) both require claims predicated on
allegations of discriminatory animus, which again is not part of this case. Bryant, 597 F.3d at
687.78 Section 1986 does not provide an independent cause of action but instead requires the

the making, performance, modification, and termination of contracts, and the
enjoyment of all benefits, privileges, terms, and conditions of the contractual
relationship.
(c) Protection against impairment
The rights protected by this section are protected against impairment by
nongovernmental discrimination and impairment under color of State law.
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42 U.S.C. § 1985(1), entitled Preventing an Officer From Performing Duties, provides:

If two or more persons in any State or Territory conspire to prevent, by force,
intimidation, or threat, any person from accepting or holding any office, trust, or
place of confidence under the United States, or from discharging any duties thereof;
or to induce by like means any officer of the United States to leave any State, district,
or place, where his duties as an officer are required to be performed, or to injure him
in his person or property on account of his lawful discharge of the duties of his office,
or while engaged in the lawful discharge thereof, or to injure his property so as to
molest, interrupt, hinder, or impede him in the discharge of his official duties.
42 U.S.C. § 1985(2), entitled Obstructing Justice; Intimidating Party, Witness, or
Juror, provides:
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If two or more persons in any State or Territory conspire to deter, by
force, intimidation, or threat, any party or witness in any court of the
United States from attending such court, or from testifying to any
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existence of a valid claim under § 1985.9 Bradt, 634 F.2d at 799 n.3. Therefore, like the

matter pending therein, freely, fully, and truthfully, or to injure such
party or witness in his person or property on account of his having so
attended or testified, or to influence the verdict, presentment, or
indictment of any grand or petit juror in any such court, or to injure
such juror in his person or property on account of any verdict,
presentment, or indictment lawfully assented to by him, or of his
being or having been such juror; or if two or more persons conspire
for the purpose of impeding, hindering, obstructing, or defeating, in
any manner, the due course of justice in any State or Territory, with
intent to deny to any citizen the equal protection of the laws, or to
injure him or his property for lawfully enforcing, or attempting to
enforce, the right of any person, or class of persons, to the equal
protection of the laws.
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42 U.S.C. § 1985(3), entitled Depriving Persons of Rights or Privileges, provides:
If two or more persons in any State or Territory conspire or go in
disguise on the highway or on the premises of another, for the
purpose of depriving, either directly or indirectly, any person or class
of persons of the equal protection of the laws, or of equal privileges
and immunities under the laws; or for the purpose of preventing or
hindering the constituted authorities of any State or Territory from
giving or securing to all persons within such State or Territory the
equal protection of the laws; or if two or more persons conspire to
prevent by force, intimidation, or threat, any citizen who is lawfully
entitled to vote, from giving his support or advocacy in a legal
manner, toward or in favor of the election of any lawfully qualified
person as an elector for President or Vice President, or as a Member
of Congress of the United States; or to injure any citizen in person or
property on account of such support or advocacy; in any case of
conspiracy set forth in this section, if one or more persons engaged
therein do, or cause to be done, any act in furtherance of the object of
such conspiracy, whereby another is injured in his person or
property, or deprived of having and exercising any right or privilege
of a citizen of the United States, the party so injured or deprived may
have an action for the recovery of damages occasioned by such injury
or deprivation, against any one or more of the conspirators.

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42 U.S.C. § 1986, entitled Action for Neglect to Prevent, provides:
Every person who, having knowledge that any of the wrongs
conspired to be done, and mentioned in section 1985 of this title, are
about to be committed, and having power to prevent or aid in
preventing the commission of the same, neglects or refuses so to do,
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claims purportedly brought under § 1983, the §§ 1981, 1985, and 1986 claims are also legally
frivolous in light of the complaint's factual allegations.
For the foregoing reasons, even under the most liberal of constructions,10 the
complaint does not allege any claims under federal law, a deficiency not overcome by
conclusory claims of federal jurisdiction. The question then becomes whether the purported
federal claims are subject to dismissal pursuant to Rule 12(b)(6), which the Court can only
do if it has original subject matter jurisdiction, or if the claims are subject to dismissal
without prejudice under Rule 12(b)(1) based on the absence of subject matter jurisdiction.
Either way the federal claims fail, but dismissal pursuant to Rule 12(b)(6) gives the Court the
discretion to nonetheless exercise supplemental jurisdiction over the state law claims.11 See
28 U.S.C. § 1367(c)(3).
In making the Rule 12(b)(1) versus 12(b)(6) determination the Court is mindful that it

if such wrongful act be committed, shall be liable to the party injured,
or his legal representatives, for all damages caused by such wrongful
act, which such person by reasonable diligence could have prevented;
and such damages may be recovered in an action on the case; and any
number of persons guilty of such wrongful neglect or refusal may be
joined as defendants in the action; and if the death of any party be
caused by any such wrongful act and neglect, the legal representatives
of the deceased shall have such action therefor, and may recover not
exceeding $5,000 damages therein, for the benefit of the widow of the
deceased, if there be one, and if there be no widow, then for the
benefit of the next of kin of the deceased. But no action under the
provisions of this section shall be sustained which is not commenced
within one year after the cause of action has accrued.
Pro se pleadings are given the benefit of liberal construction. Cooper v. Sheriff of
Lubbock Cnty., 929 F.2d 1078, 1081 (5th Cir. 1991).
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Even if the Court had dismissed the federal claims pursuant to Rule 12(b)(6), it would
have declined jurisdiction over the state law claims because this case remains in the earliest of
stages. The general rule is that a federal court should decline to exercise supplemental
jurisdiction when all federal claims are dismissed prior to trial. Brim v. ExxonMobil Pipeline Co.,
213 Fed. Appx. 303, 305 (5th Cir. 2007).
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must "avoid conflating" the question of subject matter jurisdiction with the question of
whether the plaintiff has stated a valid claim for relief. Smith v. Regional Trans. Auth., No.
13-30647, — F.3d —, 2014 WL 2853584, at *2 (5th Cir. June 23, 2014) (citing Arbaugh v.
Y&H Corp., 546 U.S. 500, 510-11 (2006)). The Court must make this distinction because "the
absence of a valid (as opposed to arguable) cause of action does not implicate subject matter
jurisdiction." ACS Recov. Servs., Inc. v. Griffin, 723 F.3d 518, 523 (5th Cir. 2013) (quoting
Steel Co. v. Citizens for a Better Envir., 523 U.S. 83, 89 (1998)). But subject matter is
implicated where the claim is "so insubstantial, implausible, foreclosed by prior decisions . .
., or otherwise completely devoid of merit as not to involve a federal controversy." See id.
(quoting Oneida Indian Nation of N.Y. v. Cnty. of Oneida, 414 U.S. 661, 666 (1974)). If the
claims that purport to invoke federal jurisdiction are not "colorable," i.e., if the claims are
"'immaterial and made solely for the purpose of obtaining jurisdiction' or [are] 'wholly
insubstantial and frivolous,'" then the issue becomes one of subject matter jurisdiction. See
Arbaugh, 546 U.S. at 513 n.10 (quoting Bell v. Hood, 327 U.S. 678, 682-83 (1946).
The Court is persuaded that the complaint in this matter is so utterly devoid of any
colorable federal claim that the complaint is subject to dismissal pursuant to Rule 12(b)(1)
for lack of subject matter jurisdiction. Plaintiffs' attempt to sue private, non-governmental
actors for civil rights violations, and to sue those same defendants for violations of §§ 1981,
1985, and 1986 when those statutes are not even remotely implicated by the factual
allegations, render any federal claims "insubstantial and frivolous," and therefore incapable
of supporting subject matter jurisdiction.
In lieu of opposing the motions to dismiss, Plaintiffs have moved to amend their
complaint once again, thereby hoping to moot the pending motions to dismiss. Because the
Court lacks subject matter jurisdiction over the existing complaint, the clear law of this

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circuit precludes Plaintiffs from amending their complaint to retroactively create jurisdiction
where none exists. In re Katrina Canal Breaches Litig., 342 Fed. Appx. at 931; Whitmire,
212 F.3d at 888.
Accordingly, and for the foregoing reasons;
IT IS ORDERED that the Motion to Dismiss (Rec. Doc. 18) filed by defendants
LPP Mortgage Ltd., Property Acceptance Corp., MGC Mortgage, Inc., and Beal's Bank, S.S.B.
and the Motion to Dismiss (Rec. Doc. 20) filed by Shapiro & Daigrepont, LLC and Toni
Arnona are GRANTED IN PART IN DENIED IN PART. The motions are GRANTED
insofar as the complaint is DISMISSED in its entirety WITHOUT PREJUDICE;
IT IS FURTHER ORDERED that the Motion for Leave to File Out of Time
Motion to Supplement and Amend Original Petition for a Second Time (Rec.
Doc. 28) filed by pro se Plaintiffs, Kwan D. Allen and Jelinda Gibson Allen is DENIED.
August 19, 2014

_______________________________
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

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