Wolfbauer v. Ocwen Loan Servicing, LLC et al

Filing 14

MEMORANDUM AND ORDER - Plaintiff's Motion for Default Judgment (filing no. 9 ) is denied. This action may proceed to service of process only as to Plaintiff's equitable state law claim for wrongful nonjudicial foreclosure based on violatio n of Neb. Rev. Stat. § 76-1008 against Defendant Ocwen. Plaintiff's motions for summons (filing nos. 3 , 7 ) are granted to the extent consistent with this Memorandum and Order. Federal Rule of Civil Procedure 4(m) requires service of the complaint on a defendant within 90 days of filing the complaint. However, Plaintiff is granted, on the courts own motion, an extension of time until 90 days from the date of this order to complete service of process. For service of process on Defend ant Ocwen Loan Servicing, LLC, the clerk of the court is directed to complete a summons form3 and USM-285 form for Defendant Ocwen Loan Servicing, LLC, using the address CSC-Lawyers Incorporating Service Company, Suite 1900, 233 South 13th Street, Li ncoln, NE 68508, and forward them together with a copy of the Complaint and a copy of this Memorandum and Order to the Marshals Service. The Marshals Service shall serve Defendant Ocwen Loan Servicing, LLC, personally at CSC-Lawyers Incorporating Ser vice Company, Suite 1900, 233 South 13th Street, Lincoln, NE 68508. Service may also be accomplished by using any of the following methods: residence, certified mail, or designated delivery service. See Federal Rule of Civil Procedure 4(h)(1); Neb. R ev. Stat. § 25-509.01 (Reissue 2016). The United States Marshal shall serve all process in this case without prepayment of fees from Plaintiff. The clerk of the court is directed to set the following case management deadline: July 5, 2018: check for completion of service of process. The parties are bound by the Federal Rules of Civil Procedure and by the Local Rules of this court. Plaintiff shall keep the court informed of his current address at all times while this case is pending. Failure to do so may result in dismissal. Pursuant to this Memorandum and Order directing service of process, and at the direction of the court, this case is removed from the pro se docket. The clerk's office shall randomly assign new judges to this case and request a reassignment order from the Chief Judge. Ordered by Senior Judge Richard G. Kopf. (Copy mailed to pro se party) (LKO)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
JAMES WOLFBAUER, an individual;
Plaintiff,

8:18CV13

vs.
OCWEN LOAN SERVICING, LLC, a
Delaware Limited Liability Company;
and DOES 1 THROUGH 10,
INCLUSIVE,

MEMORANDUM
AND ORDER

Defendants.
Plaintiff James Wolfbauer filed his Complaint (Filing No. 1) on January 11,
2018, and has been granted leave to proceed in forma pauperis (Filing No. 6). The
court now conducts an initial review of Plaintiff’s Complaint to determine whether
summary dismissal is appropriate under 28 U.S.C. § 1915(e)(2).
I. SUMMARY OF COMPLAINT
Plaintiff filed his Complaint against Defendant Ocwen Loan Servicing, LLC
(“Ocwen”) and unknown “Does 1 through 10, inclusive,” seeking damages and to
set aside a foreclosure sale of property located at 3605 W. 14th Street, North Platte,
Nebraska (hereinafter “Subject Property”). (Filing No. 1 at CM/ECF pp.2–3, 6.)
Plaintiff resides in North Platte, Nebraska, and Ocwen is a Delaware limited
liability company. (Id. at CM/ECF p.2.)
Plaintiff alleges the Subject Property is his “home” and asserts a title interest
in the Subject Property. (Id. at CM/ECF pp.2–3, 5.) Plaintiff claims Ocwen “and
any entities . . . claiming an interest in Subject Property” acted jointly “for the
purpose of enforcing an alleged secured indebtedness upon the . . . Subject

Property, extracting money from Plaintiff, and seizing Subject Property.” (Id. at
CM/ECF p.4.) On or about November 21, 2017, Plaintiff claims Ocwen and
Attorney Kerry Feld1 (acting as trustee) conducted a trustee sale of the Subject
Property without providing Plaintiff proper notice of the sale via registered or
certified mail or publication as required by Neb. Rev. Stat. § 76-1008. (Id. at
CM/ECF p.5.)
II. APPLICABLE LEGAL STANDARDS ON INITIAL REVIEW
The court is required to review in forma pauperis complaints to determine
whether summary dismissal is appropriate. See 28 U.S.C. § 1915(e). The court
must dismiss a complaint or any portion of it that states a frivolous or malicious
claim, that fails to state a claim upon which relief may be granted, or that seeks
monetary relief from a defendant who is immune from such relief. 28 U.S.C. §
1915(e)(2)(B).
Pro se plaintiffs must set forth enough factual allegations to “nudge[] their
claims across the line from conceivable to plausible,” or “their complaint must be
dismissed.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 569–70 (2007); see also
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”).
“The essential function of a complaint under the Federal Rules of Civil
Procedure is to give the opposing party ‘fair notice of the nature and basis or
grounds for a claim, and a general indication of the type of litigation involved.’”
1

While Plaintiff refers to Attorney Kerry Feld within the body of his Complaint, it does
not appear that Plaintiff intended Feld to be included as a defendant. See Miller v. Hedrick, 140
Fed. App’x 640, 641 (8th Cir. 2005) (citing Rice v. Hamilton Air Force Base Commissary, 720
F.2d 1082, 1085 (9th Cir. 1983) (“[A] party may be properly in a case if the allegations in the
body of the complaint make it plain that the party is intended as a defendant.”)).This conclusion
is supported by Plaintiff’s statement that he will amend his Complaint to allege the unknown
Doe Defendants’ names when such are ascertained, but his conscious choice to not list Feld as a
defendant. (See Filing No. 1 at CM/ECF p.3.)

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Topchian v. JPMorgan Chase Bank, N.A., 760 F.3d 843, 848 (8th Cir. 2014)
(quoting Hopkins v. Saunders, 199 F.3d 968, 973 (8th Cir. 1999)). However, “[a]
pro se complaint must be liberally construed, and pro se litigants are held to a
lesser pleading standard than other parties.” Topchian, 760 F.3d at 849 (internal
quotation marks and citations omitted).
III. DISCUSSION OF CLAIMS
A. Jurisdiction
Before the court can address Plaintiff’s claims it must determine whether it
has jurisdiction to do so. Indeed, “[i]f the court determines at any time that it lacks
subject-matter jurisdiction, the court must dismiss the action.” Fed. R. Civ. P.
12(h)(3). Subject matter jurisdiction may be proper pursuant to 28 U.S.C. § 1332,
commonly referred to as “diversity of citizenship” jurisdiction. For purposes of 28
U.S.C. § 1332, “diversity of citizenship” means that “the citizenship of each
plaintiff is different from the citizenship of each defendant.” Ryan v. Schneider
Nat’l Carriers, Inc., 263 F.3d 816, 819 (8th Cir. 2001). In addition, the amount in
controversy must be greater than $75,000.00 for diversity of citizenship
jurisdiction. 28 U.S.C. § 1332(a).
Plaintiff has alleged the amount in controversy is greater than $75,000.00,
and, given that Plaintiff seeks to recover his home, the court accepts Plaintiff’s
allegation is made in good faith. See Schubert v. Auto Owners Ins. Co., 649 F.3d
817, 822 (8th Cir. 2011) (“[T]he sum claimed by the plaintiff in good faith is
usually dispositive, [unless] it appears to a legal certainty the plaintiff’s claim is
actually for less than the jurisdictional amount.”). Plaintiff also has alleged that his
citizenship is different than the citizenship of the only named Defendant, Ocwen.
See 28 U.S.C. § 1332(c)(1) (“[A] corporation shall be deemed to be a citizen of
every State . . . by which it has been incorporated and . . . where it has its principal

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place of business . . . .”). As a result, complete diversity of citizenship exists.2
OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007)
(“Complete diversity of citizenship exists where no defendant holds citizenship in
the same state where any plaintiff holds citizenship.”)
B. Claim against Ocwen
Liberally construed, Plaintiff’s Complaint states an equitable state law claim
for wrongful nonjudicial foreclosure. Nebraska has recognized that a party may
bring an action in equity to set aside a foreclosure sale conducted under a power of
sale in a trust deed. Gilroy v. Ryberg, 667 N.W.2d 544, 553 (Neb. 2003)
(recognizing “three categories of defects in a trustee’s sale conducted under a
power of sale in a trust deed: (1) those that render the sale void, (2) those that
render the sale voidable, and (3) those that are inconsequential”); see also 24th &
Dodge Ltd. Partnership v. Acceptance Ins. Co., 690 N.W.2d 769, 775 (Neb. 2005)
(noting that such an action must seek to set aside the sale in equity). In general, a
sale will be “voidable” where the party seeking to set aside the sale shows that the
defect caused the party to be prejudiced. Gilroy, 667 N.W.2d at 554.
Here, Plaintiff alleges that he did not receive proper notice as required by
Nebraska law before a trustee sale of his home was conducted. Liberally construed,
Plaintiff alleges he held title to the Subject Property, subject to a mortgage, and the
court, therefore, can reasonably infer that Plaintiff was entitled to notice of the
trustee sale. See Neb. Rev. Stat. § 76-1008 (“Each trust deed shall contain a request
that a copy of any notice of default and a copy of any notice of sale thereunder
shall be mailed to each person who is a party thereto at the address of such person
set forth therein [or] [i]f no address of the trustor is set forth in the trust deed and if
no request for notice by such trustor has been recorded as provided in this section,
2

Of course, this determination of diversity of citizenship is based only on the citizenship
of the named parties, Plaintiff and Ocwen. Should Plaintiff amend his Complaint to name any of
the unknown Doe defendants, the court would necessarily reevaluate the question of subject
matter jurisdiction.

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a copy of the notice of default shall be published . . . .”). Taken as true, the
allegations of the Complaint state a plausible claim for relief based on irregularities
in the foreclosure process. The court cautions Plaintiff that this is only a
preliminary determination based on his allegations and is not a determination of
the merits of his claims or potential defenses thereto.
While Plaintiff may proceed to service of process on his equitable claim to
set aside the foreclosure sale, Plaintiff cannot recover punitive damages in this
action as such damages are not permitted under Nebraska law. See Distinctive
Printing & Packaging Co. v. Cox, 443 N.W.2d 566, 574 (Neb. 1989) (“[T]he fact
remains that punitive, vindictive, or exemplary damages contravene Neb. Const.
art. VII, § 5, and thus are not allowed in this jurisdiction.”); see also Enron Corp.
v. Lawyers Title Ins. Corp., 940 F.2d 307, 313 (8th Cir. 1991) (concluding insured
mortgagee could not recover punitive damages under Nebraska law in action
against title insurer). Plaintiff’s claim for punitive damages is dismissed.
IV. MOTIONS FOR SUMMONS
Plaintiff has filed two motions for summons (filing nos. 3, 7) for service on
“CSC-Lawyers Incorporating Service Company,” which Plaintiff has indicated is
the agent for service of process for Ocwen. (See Filing No. 9 at CM/ECF p.6.) It
appears from the record that Plaintiff already may have attempted service of
process on Ocwen (see id. at CM/ECF p.8), and Ocwen has received, at least, some
notice of Plaintiff’s Complaint given counsel has entered an appearance for
Ocwen. (See Filing Nos. 11, 12.) In any case, the court has now determined that
Plaintiff’s claim may proceed against Ocwen and will, therefore, grant his motions
for summons consistent with this Memorandum and Order.
V. MOTION FOR DEFAULT JUDGMENT
Plaintiff filed a Motion for Default Judgment pursuant to Rule 55(b) of the
Federal Rules of Civil Procedure. (Filing No. 9.) Counsel for Ocwen entered their
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notices of appearance and filed a response to Plaintiff’s motion. (Filing Nos. 11,
12, 13.) As set forth below, Plaintiff’s motion is denied.
“Under the Federal Rules of Civil Procedure, [a motion for default
judgment] may be granted only in those instances in which ‘a party against whom
a judgment for affirmative relief is sought has failed to plead or otherwise defend’”
the action. Norsyn, Inc. v. Desai, 351 F.3d 825, 828 (8th Cir. 2003) (quoting Fed.
R. Civ. P. 55(a)). “If the party against whom a default judgment is sought has
incurred no obligation under the Federal Rules of Civil Procedure to ‘plead or
otherwise defend’ the action,” the court should not grant a default judgment. Id.
Clearly, Ocwen was under no obligation to plead or otherwise respond to
Plaintiff’s Complaint prior to the court’s completion of this initial review. The
court specifically advised Plaintiff that an initial review would be the next step in
his case after Plaintiff was granted leave to proceed in forma pauperis and that the
matter would not proceed to service of process until after the court completed its
initial review. (Filing No. 6.) Moreover, it is not at all evident that Ocwen has
properly been served with process as a summons must be signed by the clerk and
bear the court’s seal, which the court has not authorized until now. See Fed. R. Civ.
P. 4(a), (c)(1). Accordingly, Plaintiff’s Motion for Default Judgment is denied.
IT IS THEREFORE ORDERED that:
1.

Plaintiff’s Motion for Default Judgment (filing no. 9) is denied.

2.
This action may proceed to service of process only as to Plaintiff’s
equitable state law claim for wrongful nonjudicial foreclosure based on violation of
Neb. Rev. Stat. § 76-1008 against Defendant Ocwen. Plaintiff’s motions for
summons (filing nos. 3, 7) are granted to the extent consistent with this
Memorandum and Order.

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3.
Federal Rule of Civil Procedure 4(m) requires service of the
complaint on a defendant within 90 days of filing the complaint. However,
Plaintiff is granted, on the court’s own motion, an extension of time until 90 days
from the date of this order to complete service of process.
4.
For service of process on Defendant Ocwen Loan Servicing, LLC, the
clerk of the court is directed to complete a summons form3 and USM-285 form for
Defendant Ocwen Loan Servicing, LLC, using the address “CSC-Lawyers
Incorporating Service Company, Suite 1900, 233 South 13th Street, Lincoln, NE
68508,” and forward them together with a copy of the Complaint and a copy of this
Memorandum and Order to the Marshals Service. The Marshals Service shall serve
Defendant Ocwen Loan Servicing, LLC, personally at CSC-Lawyers Incorporating
Service Company, Suite 1900, 233 South 13th Street, Lincoln, NE 68508. Service
may also be accomplished by using any of the following methods: residence,
certified mail, or designated delivery service. See Federal Rule of Civil Procedure
4(h)(1); Neb. Rev. Stat. § 25-509.01 (Reissue 2016). 4
5.
The United States Marshal shall serve all process in this case without
prepayment of fees from Plaintiff.

3

The clerk may utilize the completed summons form submitted by Plaintiff. (See Filing
Nos. 3, 7.)
4

Pro se litigants proceeding in forma pauperis are entitled to rely on service by the
United States Marshals Service. Wright v. First Student, Inc., 710 F.3d 782, 783 (8th Cir. 2013).
Pursuant to 28 U.S.C. § 1915(d), in an in forma pauperis case, “[t]he officers of the court shall
issue and serve all process, and perform all duties in such cases.” See Moore v. Jackson, 123
F.3d 1082, 1085 (8th Cir. 1997) (language in § 1915(d) is compulsory). See, e.g., Beyer v.
Pulaski County Jail, 589 Fed. Appx. 798 (8th Cir. 2014) (unpublished) (vacating district court
order of dismissal for failure to prosecute and directing district court to order the Marshal to seek
defendant’s last-known contact information where plaintiff contended that the Jail would have
information for defendant’s whereabouts); Graham v. Satkoski, 51 F.3d 710, 713 (7th Cir. 1995)
(when court instructs Marshal to serve papers for prisoner, prisoner need furnish no more than
information necessary to identify defendant; Marshal should be able to ascertain defendant’s
current address).

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6.
The clerk of the court is directed to set the following case
management deadline: July 5, 2018: check for completion of service of process.
7.
The parties are bound by the Federal Rules of Civil Procedure and by
the Local Rules of this court. Plaintiff shall keep the court informed of his current
address at all times while this case is pending. Failure to do so may result in
dismissal.
8.
Pursuant to this Memorandum and Order directing service of process,
and at the direction of the court, this case is removed from the pro se docket. The
clerk’s office shall randomly assign new judges to this case and request a
reassignment order from the Chief Judge.
Dated this 6th day of April, 2018.
BY THE COURT:
s/ Richard G. Kopf
Senior United States District Judge

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