Sykes v. RBS Citizens, N.A., et al

Filing 181

ORDER denying 168 Motion for Relief from Judgment. So Ordered by Judge Joseph A. DiClerico, Jr.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Lewis B. Sykes, Jr.
v.

Civil No. 13-cv-334-JD
Opinion No. 2017 DNH 062

RBS Citizens, N.A.,
Bank of America, N.A.,
Bank of New York Mellon,
CCO Mortgage Corporation,
Federal National Mortgage
Association, and Citibank N.A.

O R D E R
Lewis B. Sykes, Jr. brought suit in state court against RBS
Citizens, N.A.; CCO Mortgage Corporation; Federal National
Mortgage Association; Bank of America, N.A.; Bank of New York
Mellon; and Citibank, N.A., alleging claims arising from the
defendants’ involvement in the foreclosure sale of his home in
2009.

Bank of America removed the case to this court.

The

court granted the defendants’ motion for summary judgment on
November 20, 2015, and denied Sykes’s motion for a default
judgment against Citibank, N.A. on February 23, 2016.

Judgment

was entered in favor of the defendants the same day.
Sykes was represented by counsel from the beginning of the
case and until counsel withdrew in December of 2014.
Thereafter, Sykes proceeded pro se through the entry of judgment

in February of 2016.

Sykes is now represented by new counsel

and has filed a motion for relief from judgment pursuant to
Federal Rule of Civil Procedure 60(b)(3).

The defendants, other

than Citibank, N.A., object to the motion.1
Sykes requests oral argument on his motion.

Under the

local rules in this district, the court decides motions without
oral argument unless a party provides a written statement
“outlining the reasons why oral argument may provide assistance
to the court.”

LR 7.1(d).

support his request.

Sykes did not provide any reason to

Therefore, the request for oral argument

is denied.
Standard of Review
“On motion and just terms, the court may relieve a party or
its legal representative from a final judgment, order, or
proceeding for . . . fraud (whether previously called intrinsic
or extrinsic), misrepresentation, or misconduct by an opposing
party . . . .”

Fed. R. Civ. P. 60(b)(3).

The burden is on the

moving party to show fraud, misrepresentation, or misconduct by
clear and convincing evidence.

Giroux v. Federal Nat’l Mortg.

Ass’n, 810 F.3d 103, 107-08 (1st Cir. 2016).

In addition, the

moving party must show that the fraud, misrepresentation, or

Citibank, N.A. did not appear in the case and default was
entered on January 6, 2014. Sykes’s motion for default judgment
against Citibank was denied on February 23, 2016.
1

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misconduct substantially interfered with his ability to prepare
his case.

Fontanilas-Lopez v. Morell Bauza Cartagena & Dapena,

LLC, 832 F.3d 50, 63 (1st Cir. 2016).
Discussion
Sykes’s claims were resolved on summary judgment in favor
of the defendants because the claims were barred by the
governing statutes of limitations.

In support of his motion to

set aside the judgment, Sykes charges that the defendants
falsely represented that the entity which held his mortgage note
and foreclosed on the property was Federal National Mortgage
Association (“Fannie Mae”).

Sykes asserts that the entity that

held his note and foreclosed was actually a Delaware
corporation, Federal National Mortgage Association, Inc.,
(“Delaware corporation”), citing the foreclosure deed for his
property as proof of the misrepresentation.

Sykes states that

the Delaware corporation was used “as part of some intentional
scheme to avoid payment of the New Hampshire state Tax Stamps
both in this foreclosure and in several other foreclosures
throughout the state.”

Document no. 168, ¶ 6.

Sykes contends that the defendants’ alleged misrepresentation of the entity that held his mortgage note and foreclosed on
his property “had a material effect upon the outcome of this
case” because the Delaware corporation had its charter revoked
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in 2004, making it a void corporation.

Because of that status,

Sykes argues, the foreclosure sale is void.

He further asserts

that “[t]here is no statute of limitations to quiet title
against a transferee of title from such a nullity.”

Sykes

represents that he did not know of the Delaware corporation
“scheme” until after August of 2016.
The defendants object to the motion to set aside judgment.
A.

Fannie Mae
Federal National Mortgage Association, known as Fannie Mae,

is “a Government-sponsored private corporation” that was
originally chartered in 1938.

12 U.S.C. §§ 1716b & 1717;

Lightfoot v. Cendant Mortg. Corp., 137 S.Ct. 553, 556-57 (2017)
(explaining history of Fannie Mae); Perry Capital LLC v.
Mnuchin, 848 F.3d 1072, 1080-81 (D.C. Cir. 2017) (same).
Pursuant to 12 C.F.R. § 1239.3(b)(ii), Fannie Mae has “elect[ed]
to follow the corporate governance and indemnification practices
and procedures set forth in . . . [t]he Delaware General
Corporation Law.”

See Fannie Mae Bylaws, Art. 1, Sec. 1.05.

The Federal Housing Finance Authority has been the conservator
of Fannie Mae since July of 2008.

See Fairholme Funds, Inc. v.

United States, --- F. App’x ---, 2017 WL 991077, at *1 (Fed.
Cir. Mar. 14, 2017); Perry Capital, 848 F.3d at 1080-81.

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The only proof Sykes offers that the Delaware corporation,
rather than Fannie Mae, held the note on his property and
conducted the foreclosure sale is the foreclosure deed for his
property.

The deed states:

“Federal National Mortgage

Association, an association duly established under the laws of
the State of Delaware and having a usual place of business at
P.O. Box 650043, Dallas, TX, 75265-0043, holder of the following
mortgage given by:

Lewis B. Sykes and Dorothy W. Sykes . . . .”

The foreclosure deed also states Fannie Mae granted “that
portion of the Premises conveyed by said Mortgage and described
more particularly in Exhibit ‘A’” to The Bank of New York
Mellon, as Trustee for CWHEQ Revolving Home Equity Loan Trust,
Series 2007-C of 1 Wall Street, New York.
Sykes does not explain why he believes the foreclosure deed
shows that the holder of his note and the foreclosing entity was
the Delaware corporation rather than Fannie Mae.

In its

objection, Fannie Mae states that the statement in the
foreclosure deed that Fannie Mae is an association established
under Delaware law was an error and does not mean that Fannie
Mae is a Delaware corporation.2

The filings in a different case,

In support, Fannie Mae submits the affidavit of Francis J.
Nolan, Esq., who signed the foreclosure deed on behalf of Fannie
Mae. Nolan states that the foreclosure deed erroneously
identifies Fannie Mae as an association established under the
laws of Delaware. Nolan also states that the statement in the
2

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which Sykes provides, do not support his claim and instead
should have alerted Sykes’s counsel to the error of his theory.3
It is undisputed that Sykes purchased the property and
obtained the mortgage in 2005, a year after the Delaware
corporation ceased to exist.

The defendants provide a copy of

the assignment of Sykes’s mortgage from CCO Mortgage Corporation
to Federal National Mortgage Association, PO Box 650043, Dallas,
TX 76265-0043, which is dated July 30, 2009.

The assignment was

recorded in the Rockingham County Registry of Deeds on August
21, 2009.

The foreclosure sale of Sykes’s property occurred on

foreclosure deed was a mistake and that no scheme or effort to
defraud existed.
As provided in its bylaws and noted above, Fannie Mae is
federally chartered and has elected to follow the corporate law
of Delaware.
Sykes provides copies of filings from a case in the United
States District Court for the District of Delaware, Timothy J.
Pagliara v. Federal National Mortgage Association, 16-cv-193-GMS
(D. Del. Mar. 25, 2016). In that case Pagliara, as a
stockholder, brought suit in state court, seeking to inspect and
copy certain books and records kept by Fannie Mae. Fannie Mae
removed the case to federal court. Pagliara moved to remand,
stating in support of his motion that Fannie Mae “was initially
federally chartered, but subsequently incorporated in Delaware.”
In response, Fannie Mae provided proof that Fannie Mae is not a
Delaware corporation. The case was remanded due to a lack of a
federal question because Pagliara brought a narrow state law
claim and because “[f]ederal question jurisdiction does not
exist here solely by virtue of Fannie Mae’s status as a
federally-chartered corporation.” Doc. no. 38, at n.1 (emphasis
added).
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October 2, 2009, and the deed was recorded in the Rockingham
County Registry of Deeds on October 14, 2009.
As such, Sykes provides no proof, much less clear and
convincing proof, that the defendants misrepresented that Fannie
Mae held his mortgage note and foreclosed on his property.

The

record plainly establishes that Fannie Mae was assigned Sykes’s
mortgage and foreclosed on his property.
B.

The Delaware Corporation “Scheme”
Sykes represents to the court that he was not aware of the

issues he now raises about Fannie Mae and the Delaware
corporation until after August of 2016.4
of his motion:

Sykes states in support

“The scheme of the Delaware corporation was only

first revealed in August of 2016.

Plaintiff did not in fact

learn of it himself until sometime thereafter.

Upon learning of

this fact, Plaintiff has diligently pursued gathering the
requisite information to file this Motion for Relief of Judgment
under Rule 60(b).”

Id., ¶ 6.

The record shows that Sykes asserted the same “scheme”
theory about Fannie Mae and the Federal National Mortgage
Association, Inc. (the Delaware corporation) in support of his
motion for summary judgment, filed on January 13, 2015.

See

Sykes is represented by counsel who signed the motion on
Sykes’s behalf. See Fed. R. Civ. P. 11(b).
4

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Document no. 74.
discovery.

He also pressed the “scheme” theory in

See Document no. 84.

In addition, on April 16,

2015, Sykes filed a motion to amend the discovery plan, which
attached Exhibit A, titled “Topic: Scams Used in the Case,” that
discusses Sykes’s theories about the Delaware corporation,
Fannie Mae, and tax exemptions.

On April 22, 2015, Sykes filed

a thirty-two page “Addendum” in the case, titled, “Topic: Scams
Used in the Case,” with the same subject matter.

On May 18,

2015, Sykes filed a memorandum titled “Plaintiff’s Memorandum
Regarding the ‘All Parties Agree’ Stay, the Plaintiff’s November
4, 2014 Counter-Offer and the Elements of ‘Discovery’ Collected
within the statute of Limitations Period.”

The memorandum had

eighteen exhibits appended to it, at least one of which
addressed Sykes’s theories about the Delaware corporation.
Document no. 103, Attach. C.
Therefore, contrary to Sykes’s representation in the motion
to set aside judgment, he was aware of the Delaware corporation
and the “scheme” theory long before judgment entered.

Given his

prior knowledge of the Delaware corporation “scheme”, he would
not be able to show that the alleged misrepresentation
substantially interfered with the preparation of his case.

More

importantly, Sykes has not provided any evidence to show that

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the defendants misrepresented that Fannie Mae was the entity
which held his mortgage loan and foreclosed.
Conclusion
For the foregoing reasons, the plaintiff’s motion for
relief from judgment (document no. 168) is denied.
SO ORDERED.

__________________________
Joseph DiClerico, Jr.
United States District Judge
March 28, 2017
cc:

Elizabeth J. Ireland, Esq.
Andrea Lasker, Esq.
Geoffrey Williams Millsom, Esq.
Robert E. Murphy, Jr., Esq.
Thomas J. Pappas, Esq.
William C. Sheridan, Esq.
Elizabeth T. Timkovich, Esq.

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