Rabbe et al v. Wells Fargo Home Mortgage, Inc., et al
MEMORANDUM AND ORDER - IT IS ORDERED that the plaintiffs' motion (filing 12 ) for a temporary restraining order, preliminary injunction, and permanent injunction is denied. Ordered by Judge John M. Gerrard. (TCL)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
RANDOLPH MICHAEL RABBE
AND LISA ANN RABBE,
MEMORANDUM AND ORDER
WELLS FARGO HOME
MORTGAGE, INC. AND WELLS
This matter is before the Court on the plaintiffs' motion (filing 12) for a
temporary restraining order, preliminary injunction, and
injunction. That motion will be denied.
STANDARD OF REVIEW
When deciding whether to issue a temporary restraining order or
preliminary injunction, the Court weighs the four Dataphase factors: (1) the
threat of irreparable harm to the movant; (2) the state of the balance between
this harm and the injury that granting the injunction will inflict on other
parties; (3) the probability that the movant will succeed on the merits; and (4)
the public interest. Johnson v. Minneapolis Park & Recreation Bd., 729 F.3d
1094, 1098 (8th Cir. 2013); (citing Dataphase Sys., Inc. v. C L Sys., Inc., 640
F.2d 109, 114 (8th Cir. 1981) (en banc)).
A preliminary injunction is an extraordinary remedy, and the movant
bears the burden of establishing its propriety. Roudachevski v. All-Am. Care
Centers, Inc., 648 F.3d 701, 705 (8th Cir. 2011); see also Winter v. Natural
Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). In deciding whether to grant a
preliminary injunction, likelihood of success on the merits is the most
significant factor. Laclede Gas Co. v. St. Charles Cnty., 713 F.3d 413, 419-20
(8th Cir. 2013). A party seeking injunctive relief need not necessarily show a
greater than 50 percent likelihood that it will prevail on the merits. Planned
Parenthood Minnesota, North Dakota, South Dakota v. Rounds, 530 F.3d 724,
731 (8th Cir. 2008). But the absence of a likelihood of success on the merits
strongly suggests that preliminary injunctive relief should be denied. Barrett
v. Claycomb, 705 F.3d 315, 320 (8th Cir. 2013).
The Court's decision to deny the plaintiffs' motion will be based on its
finding that the plaintiffs do not have any likelihood of success on the merits
of their complaint. That conclusion will be easier to understand after a brief
recitation of the facts as they appear, incompletely and somewhat
confusingly, from the plaintiffs' filings.
At some point, apparently in 2003, Wells Fargo1 loaned the plaintiffs
$178,589. Filing 1-1 at 3-4; filing 10 at 2. The loan seems to have been
secured by residential real property in Omaha, Nebraska. See filing 12. But,
the plaintiffs allege, they discovered on July 17, 2016 that Wells Fargo had
defrauded them. Filing 1-1 at 4. After that, however, the plaintiffs contend—
and have presented some evidence—that as of September 19, the loan (or, at
least, a loan) was paid off. Filing 12 at 5-8. That was apparently
accomplished by two large lump sum payments, totaling $99,000, made on
The named defendants are Wells Fargo Home Mortgage, Inc. and Wells Fargo, N.A. Filing
1-1 at 1. The distinction does not seem to be significant, at least at this point, and the Court
refers to them collectively as "Wells Fargo."
September 16 and 17. Filing 12 at 7. But the plaintiffs also contend that just
a few days later, they sent a number of documents to Wells Fargo purporting
to effectively cancel the loan and rescind a trust deed that was, presumably,
securing the indebtedness. See filing 12 at 11-16.
The plaintiffs filed this case on February 6, 2017. Filing 1-1 at 1.
Generally summarized, the plaintiffs accuse Wells Fargo of breach of
contract, fraud, racketeering, usury, and violation of the Truth in Lending
Act (TILA), 15 U.S.C. § 1601 et seq. Filing 1-1 at 1-7. And then, on March 30,
2017, the plaintiffs were sent a notice of default by a successor trustee to a
trust deed for the property, stating that they were in default on a promissory
note held by Wells Fargo, and that the property would be sold to satisfy the
debt. Filing 12 at 17. The plaintiffs represent that a foreclosure auction has
been scheduled for June 19. Filing 12 at 4. That is what they seek to enjoin.
See filing 12 at 1-2.
But the primary problem is that, from a review of the plaintiffs'
complaint, the Court finds no basis to conclude that the plaintiffs have any
likelihood of success on the merits of their case. The complaint is not
premised on any theory relating to the supposed satisfaction of their loan.
Rather, the central assertion underpinning all of their theories of recovery
seems to be that Wells Fargo did not lend "lawful money of the United States
for the full value of the loan" because it loaned "beyond its customers'
deposits" and the checks written "were not backed by or redeemable in
Federal Reserve Notes, coins or lawful money of the United States for their
full face value." Filing 1-1 at 3-4. The "only consideration" for the loan, the
plaintiffs say, was a "book entry demand deposit" that Wells Fargo created.
Filing 1-1 at 4. Wells Fargo, they allege, "merely transferred some book
entries and never intended to redeem this check in lawful money of the
United States." Filing 1-1 at 4.
The Court has seen similar theories before. See In re Anthony, 481 B.R.
602, 617 (D. Neb. 2012). The plaintiffs' particular permutation is commonly
referred to as a "vapor money" or an "unlawful money" claim, and has been
uniformly rejected by every court to consider it. See, Tonea v. Bank of Am.,
N.A., 6 F. Supp. 3d 1331, 1344-45 (N.D. Ga. 2014); Gallant v. Deutsche Bank
Nat. Trust Co., 766 F. Supp. 2d 714, 721-22 (W.D. Va. 2011) (collecting cases);
McLaughlin v. CitiMortgage, Inc., 726 F. Supp. 2d 201, 212-14 (D. Conn.
2010) (collecting cases); see also, e.g., Allah-Bey v. Roberts, 668 F. App'x 419,
420 (3d Cir. 2016); Moser v. Citimortgage, Inc., No. 1:12-CV-1258, 2013 WL
4519346, at *2 (M.D.N.C. Aug. 26, 2013) (collecting cases); Blake v. Irwin
Mortg., No. CV-10-2435, 2011 WL 98538, at *2 (D. Ariz. Jan. 12, 2011)
(collecting cases); Barnes v. Citigroup Inc., No. 4:10-CV-620, 2010 WL
2557508, at *2 (E.D. Mo. June 15, 2010) (collecting cases); Lawrence v.
Thornburg Mortg. Home Loans, Inc., No. 1:09-CV-3356, 2010 WL 11433295,
at *4 (N.D. Ga. Jan. 12, 2010), aff'd, 624 F. App'x 721 (11th Cir. 2015), and
aff'd, 624 F. App'x 721 (11th Cir. 2015) (collecting cases); Rodriguez v.
Summit Lending Sols., Inc., No. 09-CV-773, 2009 WL 1936795, at *2 (S.D.
Cal. July 7, 2009); Alejo v. Mozilo, No. CV 09-680, 2009 WL 692001, at *3
(C.D. Cal. Mar. 16, 2009); Frances Kenny Family Trust v. World Sav. Bank
FSB, No. C 04-03724, 2005 WL 106792, at *5 (N.D. Cal. Jan. 19, 2005)
(collecting cases); Thiel v. First Fed. Sav. & Loan Ass'n of Marion, 646 F.
Supp. 592, 596 (N.D. Ind. 1986).
Reasoning on the most fundamental level, a level which requires
more common sense than legal acumen, plaintiffs' theory is
absurd. A check issued by a mortgagee need not be "legal tender"
for the loan to be valid. Far from suggesting any fraudulent
conduct, the drafts issued by the [creditor] in this case
accomplished the only conceivable purpose of the transaction:
they allowed [the buyer] to buy the properties at issue. . . . Thus,
while dollar bills and coins have been declared by Congress as
legal tender, and so can be used to pay any debt, not all debts
need be paid in legal tender if the parties agree.
Thiel, 646 F. Supp. at 596. Pro se litigants have, in fact, even been sanctioned
for pursuing frivolous litigation premised on such reasoning. Id. at 596-98.
The different tack taken by the plaintiffs' motion for injunctive relief—
that the loan has been paid—fares little better. To begin with, it bears no real
resemblance to the claim presented in the complaint, and the Court is
unconvinced that injunctive relief can be premised on what is essentially a
different claim than the one presented by the pleadings. But beyond that, the
record is incomplete with respect to the actual sequence of transactions
leading to the alleged foreclosure. The plaintiffs have provided some
documents, but not enough to explain, for instance, why they sought to cancel
a loan that had supposedly been satisfied, or why they would have paid off a
loan that they believed at the time, according to their own allegations, to be
fraudulently issued. The documents that have been provided are just as
consistent with a refinancing as with complete satisfaction of the
indebtedness. Simply put, the Court is unpersuaded by the evidence that the
plaintiffs' obligation to Wells Fargo, secured by the real property, has been
In sum, the Court finds no likelihood of success on the merits of the
plaintiffs' claims and, without such a likelihood, injunctive relief is
IT IS ORDERED that the plaintiffs' motion (filing 12) for a
permanent injunction is denied.
Dated this 9th day of June, 2017.
BY THE COURT:
John M. Gerrard
United States District Judge
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