Hughes v. Bank of America Corporation et al

Filing 25

ORDER denying 9 , 10 , 11 , 13 , 14 , and 16 Motions. FURTHER ORDERED that all claims except the first, sixth, seventh, and thirteenth are DISMISSED. Signed by Chief Judge Robert C. Jones on 7/9/13. (Copies have been distributed pursuant to the NEF - JC)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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GREGORY HUGHES,

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This is a residential foreclosure avoidance case involving one property. Plaintiff Gregory

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Plaintiff,
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vs.
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BANK OF AMERICA CORP. et al.,
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Defendants.

3:12-cv-00513-RCJ-VPC
ORDER

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Hughes sued Defendants Bank of America Corp., Bank of America, N.A., BAC Home Loan

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Servicing, LP, ReconTrust Co., N.A., Federal National Mortgage Association (“Fannie Mae”),

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the Washoe County Recorder’s Office, and Kathy Burke in pro se in state court on thirteen

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nominal causes of action1: (1) Real Estate Settlement Procedures Act (“RESPA”) violations; (2)

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Breach of Contract (failure to comply with HUD regulations before foreclosure, as required by

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the deed of trust); (3) “Unreasonable Collection Efforts”; (4) Intentional Misrepresentation

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(accepting payments but not applying them to Plaintiff’s account); (5) Fair Debt Collection

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Practices Act (“FDCPA”) violations; (6) violations of the “FTC Safeguards Rule,” 67 Fed. Reg.

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36484; (7) Racketeer and Corrupt Organizations Act (“RICO”) violations; (8) Abuse of Process;

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The causes of action are listed as 1–7 and 9–14. (See generally, Compl., July 30, 2012,
ECF No. 1-1, at 5).

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(9) Intentional Misrepresentation (falsely claiming ownership of the promissory note); (10) “Bad

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Faith Bargaining”; (11) False Pretenses; (12) “Filing a False Certificate (Robosigning)”; and (13)

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Intentional Infliction of Emotional Distress (“IIED”). Defendants removed. Six motions are

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pending before the Court.

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First, Plaintiff has filed two Motions to Stay (ECF Nos. 6, 16), asking the Court to stay

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the present matter until the state court can rule on pending motions. The Court denies the

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motions. The state court has been divested of jurisdiction over this matter unless and until the

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Court remands. See 28 U.S.C. § 1446(d) (“Promptly after the filing of such notice of removal of

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a civil action the defendant or defendants shall give written notice thereof to all adverse parties

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and shall file a copy of the notice with the clerk of such State court, which shall effect the

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removal and the State court shall proceed no further unless and until the case is remanded.”

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(emphasis added)); accord Resolution Trust Corp. v. Bayside Developers, 43 F.3d 1230, 1238

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(9th Cir. 1994) (“Thus, the clear language of the general removal statute provides that the state

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court loses jurisdiction upon the filing of the petition for removal.” (quoting id. with the same

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emphasis)). Not only will the Court not stay the present action pending appeal to the Nevada

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Supreme Court, but the Court will, upon motion by Defendants, enjoin the state court

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proceedings pursuant to the All Writs Act and Anti-Injunction Act, as such an injunction may be

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necessary to protect this Court’s jurisdiction. There is no indication in the present case that any

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other in rem or quasi in rem proceeding was proceeding in state court apart when the present case

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was removed such that the Court should abstain under the prior exclusive jurisdiction doctrine.

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If Plaintiff has evidence of such facts, he may present them for the Court’s consideration, or he

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may attack the removal on jurisdictional or procedural grounds—he has done so in a separate

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motion—but unless and until the Court remands for jurisdictional or procedural concerns, the

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state courts have no jurisdiction over the present matter.

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Second, Plaintiff asks the Court to remand, but his only argument is that the state court
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had original jurisdiction over the present matter. The question in removal cases, however, is not

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whether the state court had original jurisdiction, but whether the federal court also has original

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jurisdiction. It is clear that there is removal jurisdiction over this case, as Plaintiff has brought

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multiple federal causes of action, see 28 U.S.C. §§ 1331, 1441(a), and although there appear to

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be forum Defendants, the forum-defendant rule does not apply because the sole basis for removal

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was not the diversity statute, see id. at § 1441(b)(2).

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Third, Plaintiff asks the Court to disqualify opposing counsel. Specifically, Plaintiff asks

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the Court to rule that Fannie Mae2 must retain counsel separate from the other Defendants

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because it has filed suit against Bank of America in New York. The conflict of interest rules,

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however, do not require withdrawal in the present case. An attorney in Nevada may not

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represent one client against another client in a proceeding in which the clients are materially

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adverse to one another or where the attorney’s representation will be materially limited by duties

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to another client, a third person, or the attorney’s own interests. See Nev. R. Prof. Conduct 1.7(a).

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That situation is clearly not present here, because Fannie Mae and Ban of America are not

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adverse to one another in the present case, and Plaintiff does not allege that Federal National

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Mortgage Association’s attorneys in the present matter, Attorneys Ariel E. Stern or Christine M.

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Parvan, represented Bank of America in Fannie Mae’s New York lawsuit against Bank of

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America such that their representation of Fannie Mae will be materially limited by any duties to

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Bank of America. Also, an attorney in Nevada may not represent a current client against a

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former client if the current matter is substantially related to the matter in which the attorney

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represented the former client or if the during the course of representation of the former client the

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attorney obtained confidential information about the former client relevant to the present matter.

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See Nev. R. Prof. Conduct 1.9(b). But, again, Plaintiff does not allege that Federal National

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The Court assumes Plaintiff means this party, although he states “Federal National
Mortgage Corporation” in the motion.
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Mortgage Association’s attorneys in the present matter, Attorneys Ariel E. Stern or Christine M.

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Parvan, represented Bank of America in Fannie Mae’s New York lawsuit against Bank of

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America. Therefore, even assuming Plaintiff’s allegations concerning the New York action are

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true, which Defendants deny, there is no perceivable conflict of interests in this case.

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Fourth, Defendants ask the Court to strike the first Motion to Stay and the Motion for

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Disqualification. The Court denies the motions. Although without merit, the motions are not

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redundant, immaterial, impertinent, or scandalous. See Fed. R. Civ. P. 12(f).

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Finally, the Court has ordered Plaintiff to show cause why the case should not be

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dismissed as precluded based upon the final judgment on the merits issued in Case No. 3:11-cv-

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617. Plaintiff argues only that his attorney in the previous action had no direct interest in the

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subject matter of the case and therefore defrauded Plaintiff such that he had no full and fair

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opportunity to litigate the claims. The Court rejects this argument. Not only is it appropriate for

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an attorney not to have an interest in the subject matter of litigation, it is an ethical violation for

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him to have such an interest. See Nevada R. Prof. Conduct 1.8(i). And an attorney’s alleged poor

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performance is not “fraud” supporting a relief from judgment under Rule 60(b)(3). Such fraud

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must be “by an opposing party.” See id.

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The Court finds after taking judicial notice of its own docket that the case should not be

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dismissed completely, but that many claims must be dismissed as precluded as against certain

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Defendants. The following parties were the same in both lawsuits: Bank of America, N.A., BAC

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Home Loan Servicing, LP, and ReconTrust Co. The claims as against those entities are

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precluded, except for the first, sixth, seventh, and thirteenth claims, as identified above, the

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gravamen of which were not litigated in the previous action. Plaintiff has never litigated any of

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his claims against the remaining parties.

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CONCLUSION

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IT IS HEREBY ORDERED that the Motions (ECF Nos. 9, 10, 11, 13, 14, 16) are

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DENIED.
IT IS FURTHER ORDERED that all claims except the first, sixth, seventh, and thirteenth

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are DISMISSED as precluded as against Defendants Bank of America, N.A., BAC Home Loan

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Servicing, LP, and ReconTrust Co.

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IT IS SO ORDERED.

8 Dated this 20th day of June, 2013.
Dated this 9th day of July, 2013.
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_____________________________________
ROBERT C. JONES
United States District Judge

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