Limtung v. Steven J. Baum, P.C. et al

Filing 52

MEMORANDUM AND ORDER: For the reasons set forth above, the moving defendants' motions to dismiss (Doc. Nos. 39 , 40 , 42 .) are granted. Limtung's FCPA claims are dismissed with prejudice. Limtung is granted thirty (30) days from the dat e of this Memorandum and Order to seek leave to amend his complaint consistent with this Court's ruling. Although Limtung paid the filing fee to initiate this action, the Court certifies pursuant to 28 U.S.C. § l9l5(a)(3) that any appeal fr om this Order would not be taken in good faith, and therefore, in forma pauperis status is denied for purpose of an appeal. See Coppedge v. United States, 369 U.S. 438, 444-45 (1962). The Clerk of Court is respectfully directed to mail a copy of this Memorandum and Order to plaintiff Hin Limtung, pro se, at the address listed on the docket and note the mailing on the docket. Ordered by Judge Roslynn R. Mauskopf on 6/23/2017. (Taronji, Robert)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

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HIN Y. LIMTUNG,

MEMORANDUM AND ORDER
16-CV-100 (RRM) (SMG)

Plaintiff,
-againstWELLS FARGO BAN K, N .A., et al. ,
Defendants.

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ROSLYNN R. MAUSKOPF, United States District Judge.
Plaintiff Hin Limtung, proceeding prose, brings this action alleging that defendants
engaged in a criminal enterprise to fraudulently foreclose on his mortgage. (See Compl. (Doc.
No. 1) at~ 1.) Specifically, Limtung alleges that defendants have vio lated the Racketeer
Influenced and Corrupt Organizations Act, 18 U.S.C.A. §§ 1961 el seq. (" RICO"), and the Fair
Debt Collections Practices Act, 15 U.S.C. §§ 1692 el seq. ("FDCPA"). For the reasons that
follow, Limtung's complaint is dismissed. However, Limtung is granted thirty (30) days from
the date of this Memorandum and Order to seek leave to amend the compl aint in order to bring
his RICO claims in compliance with Federal Rules of Civil Procedure ("Ru les") 9(b) and
12(b)(6).

BACKGROUND
The fo llowing facts are taken from Limtung 's complaint and assumed true for purposes
of this Memorandum and Order. On August 6, 2007, Well s Fargo Bank, N .A. ("Wells Fargo")
filed a foreclosure lawsuit in Queens County New York Supreme Court against Limtung in
connection with a property at 3 1-70 Crescent Street, Astoria, New York, 11106. (See Com pl. at
~

31.) On February 19, 2009, the court awarded Wells Fargo summary judgment, and on

November 12, 2014, the court signed a Judgment of Foreclosure and Sale. (See CompI. at~~ 35,

65.) During the pend ency of the foreclosure, the mortgage was first assigned by Wells Fargo to
EMC Mo1tgage Corp., which subsequently assigned it to Wilmington Savings Fund Society,
FSB as Trustee of Primestar-H Fund, which subsequently assigned it to Wilmington Savings
Fund Society, FSB as Trustee of Primestar-F Fund I Trust ("WSF"). (See, Comp!. at Exs. B, G,

K.)
On January 8, 2016, Lim tung filed a lengthy complaint alleging that defendants
perpetrated a complex conspiracy to secure foreclosure on hi s property through fraud. (See

generally Comp!.) For example, Limtung alleges that defendants fraudulently fai led to
effectuate service of a Notice of Entry of Default Judgment in the foreclosure action, and
engaged in " illegal and unconstitutional" conduct when WSF became the named plaintiff in the
foreclosure after its assignment. (See, e.g., Compl. at~~ 50, 55, 57, 63, 64, 80, 81, 98.) Lim tung
alleges this conspiracy against Wells Fargo, its assignees, officers of the assignees, the assignees'
servicing agents, the assignees' lawyers and notaries, various debt collectors, and a courtappointed mediator. 1 (See id.~~ 2-33.) The complaint also includes numerous conclusory
statements, such as that defendants have "actively hidden the illegal transactions and not filed the
required Filing to the SEC" and that defendants concealed the inauthenticity of documents
associated with the foreclosure. (Comp!.

at ~~

52-61, 160-62.)

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On March 9, 20 17, Lim tung filed requests for certificates of default against defendants Wells Fargo, Steven J.
Baum, P.C., and Steven J. Baum. (See Doc. Nos. 43, 45, 46, 47.) The Clerk of Court has not entered default.
Pursuant to Ru le 55, entry of default is appropriate where a defendant has " failed to plead or otherwise defend" the
action. Entry of default is not appropriate where the defendant was not properly served with process. See, e.g.,
Dorrough v. Harbor Sec., LLC, No. 99-CV-7589 (ILG), 2002 U.S. Dist. LEXIS 13546, at* 12-* 13 (E.D.N.Y. May
10, 2002). Here, Wells Fargo has properly moved to dismiss the complaint pursuant to Rule 12, and thus has not
failed to "otherwise defend" the action. In add ition, Limtung failed to properly serve Steven J. Baum and Steven J.
Baum, P.C. (See Opp'n Default (Doc. No 48).) Accordingly, Limtung's requests for certificates of default are
denied.

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Limtung contends that he does not "seek for the Honorable Court to declare that the
Foreclosure Judgment that was rendered by the State was erroneous as a result of Extrinsic Fraud
Court (this is a function of the State Court's Appellate Division) but seeks this Honorable
Court's determination on the Defendant[s' ] actions that led to the State Court Judgment and that
v iolated [RICO and] the Mail and Wire Fraud Statutes and that entitle the Plaintiff remedy of
monetary damage. " (Opp' n (Doc. No 42-6)

at~

7.) That is, Limtung argues that the foreclosure

was procured by fraud, and thus he is entitled to the value of the foreclosed property: $2,000,000
in money damages. (Compl. at~ 1.)
On February 17, 2017, defendants Peter S. Thomas, Jason Burr, Selene Finance LP,
We lls Fargo, David McConnell , Jamie Rand, and WSF (collectively, " moving defendants")
moved to dismiss the complaint for fai lure to state a claim for which relief can be granted
pursuant to Rulel2(b)(6) and fai lure to plead fraud with particularity pursuant to Rule 9(b). (See
Mots. Di smiss (Doc. Nos. 39, 40, 42).) 2

DISCUSSION
I.

Standard of Review

Pursuant to Rule 12(b)(6), a party may move to dismi ss a cause of action that "fail[s] to
state a claim upon which relief can be granted." Fed. R. C iv. P. 12(b)(6). In order to withstand a
motion to dismiss, a complaint "must contain sufficient factual matter, accepted as true, to 'state

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Defendant Peter S. Thomas includes a motio n for sanctions with his motion to dismiss. (See Thomas Mot. Dismiss
(Doc. No. 39).) T homas argues that the instant lawsu it is one in a seri es of delay tactics and frivolous litigatio n
techn iq ues perpetrated by Limtung. (See generally id.) On that basis, T homas moved for mo netary sanctions
aga inst Limt ung purs uant to Rule 11 . (Id.) However, a " motion fo r sanctions must be made separate ly from any
other motion a nd must describe the specific conduct that allegedly violates Rule I l(b)." Fed. R. Civ. P. 1 l(c)(2).
" Ru le 11 (c)(2) also creates a 'safe harbor' that gives the attorney a chance to modi fy or w ithdraw the cha llenged
submi ssion so as to avoid sanctions." Charles v. Levitt, No. 15-CV-9334 (PAE), 20 16 U.S. Dist. LEX IS 95725, at
* 18 (S. D.N. Y. July 21 , 20 16). Rule 11 further provides that a " motio n for sanctions is initially to be served o nly on
the attorney, and not filed with the Court." Id. Therefore, " [s]anctions may not be awarded under Rule I l (c)(2)
where proper notice and opportunity to withdraw or correct the filing were not provided to the party to be
sanctioned." Id. According ly, Thomas's mori on for sancti ons is denied.

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a claim to relief that is plausible on its face."' Ashcroft. v. Iqbal, 556 U.S. 662, 678 (2009)
(quo ti ng Bell Atlantic Corp. v. Twombly, 550 U. S. 544, 570 (2007)). A claim is plausible "when
the plaintiff pleads factual content that allows the collli to draw the reasonable inference that the
defendant is liable for the miscond uct alleged." Matson v. Bd. of Educ., 631 F.3 d 57, 63 (2d C ir.
20 11 ) (quoting Iq bal, 556 U .S. at 678). The Cow-t assumes the truth of the fac ts alleged and
draws all reasonable inferences in the nonmovant's favor. See Harris v. Mills, 572 F.3d 66, 7 1
(2d Cir. 2009).
When a p laintiff proceeds prose, the p laintiffs pleadings should be held " to less
stringent standards than fo rmal pleadings drafted by lawyers." Erickson v. Pardus, 55 1 U.S. 89,
94 (2007) (per curiam ) (quoting Estelle v. Gamble, 429 U. S. 97, 104- 05 ( 1976)); see also Harris

v. Mills, 572 F.3d 66, 72 (2d C ir. 2009) (noting that even after Twombly, courts " remain
o bligated to construe a prose complaint li berally"). "[T]he mandate to read the papers of prose
litigants generously makes it appropriate to consider p laintiffs additional materials, such as his
opposition memo randum" at the motion to dismiss stage. Burgess v. Goard, No. 98-CV-2077
(SAS), 1999 WL 33458, at * 1 n.1 (S.D.N. Y. Jan 26, 1999) (internal quotation marks and
citations om itted). Notwithstanding the liberal pleading standards g ranted to a prose plaintiff, if
" the all egations in a complaint, however true, could not raise a claim of entitlement to relief,"
dismi ssal is warranted. Bell Atlantic C011J. v. Twombly, 550 U.S. 544, 558 (2007). 3

3

Defendants We lls Fargo and WSF have a lso moved to dismiss the complaint for lack of subject matter jurisdiction
pursuant to the Rooker-Feldman doctrine. (See Doc. Nos. 40, 42.) The Rooker-Feldman doctrine precludes cases
brought in lower fede ral courts by "state-court losers complaining of injuries caused by state-court judgments
rendered before the district court proceedings commenced and inviting d istrict court review and rejection of those
judgments." Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). In Babb v. Capita/Source,
Inc., 588 F. App 'x 66 (2d Cir. 20 15), the Second C ircllit held that a suit is not barred by Rooker-Feldman where the
complaint "seeks damages for injuries suffered as a result of defendants ' alleged fraud and does not attempt to
reverse or undo a state court judgment." Babb, 588 F. App 'x at 68. Courts in this circui t have since held that
Rooker-Feldman does not bar claims where, as here, a plaintiff al leges fraud and "seeks damages equivalent to the
va lue" of a foreclosed property without seeking to reverse the state court judgment through return of the foreclosed
property itself. Wenegieme v. U.S. Bank Nat '/ Ass 'n, No. I 6-CV-6548 (ER), 2017 U.S. Dist. LEX IS 68909, at *8
(S.D.N.Y. May 4, 20 17); accord Worthy- Pugh v. Deutsche Bank Nat '/ Trust Co., 664 F. App'x 20, 22 (2d C ir.

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II.

FDCPA

"The FDCPA mandates that any action to enforce liabi lity arising under the act be
commenced ' within one year from the date on which the violation occurs."' Boyd v. JE. Robert
Co., No. 05-CV-2455 (KAM), 20 10 U.S. Dist. LEXIS 140905, at *18 (E.D.N.Y. Mar. 3 1, 20 10)

(quoting 15 U. S.C. § 1692k(d)). Specifically, "the latest date upon which the one year period
begins to run is the date when a plainti ff receives an allegedly unlawful communication." Somin
v. Total Cmty. Mgmt. Corp ., 494 F. Supp. 2d 153 (E.D.N.Y. June 26, 2007). While the FDCPA

is subj ect to equitable toll ing, it appli es on ly in " rare and exceptional" circumstances. Berlin v.

United States, 478 F.3d 489, 494 n.3 (2d Cir. 2007). "Generally, equi table tolling applies only
where defendant has engaged in conduct to conceal wrongdoing and, as a result, plaintiff fails to
discover facts giving rise to the claim, despite the exerci se of reasonable diligence." Som in, 494
F. Supp. 2d at 158- 59.
Here, even assuming that Limtung ' s conclusory allegations could make out a claim under
the FDCPA, those claims are time-barred. The most recent date that Limtung references with
respect to an " unlawful communication" under the FDCPA is April 27, 2014. On that date,
Limtung alleges that the defendants knowingly submitted false information in a "Referee's
Report" to the state court. (Campi.

at ~

162.) However, Limtung fil ed the instant complaint on

January 1, 20 16, over one after the allegedly unlawful communicati on took place. As such the
statute of li mitations on the FDCPA claim had run. Furthermore, Lim tung alleges that he
" became aware [ofj the Defendants' Criminal Scheme on around December 26, 2014." (Campi.
at~

87.) Thus, Limtung cannot plausibly assert that the defendants' wrongdo ing prevented him

20 16). Accordingly, the Rooker-Feldman doctrine does not bar the Court fro m reviewing Limtung's claims, and the
motions to dismiss for lack of subject matter j urisdiction pursuant to Rule l 2(b )( 1) are den ied.

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from discovering facts that might give rise to an FDCPA claim. See Somin, 494 F. Supp. 2d at
158-59. Accordingly, Limtung' s FDCPA claims are dismissed with prejud ice as time-barred.

III.

RICO

RICO grants standing for a civil action to "any person injured in his business or propetty
by reason of a violation of [18 U.S.C. § 1962]." 18 U.S.C. § 1964 (c). Under RICO, a plaintiff
must plead "( 1) the defendant's violation of§ 1962, (2) an injury to the plaintiff s business or
property, and .(3) causation of the injury by the defendant's violation." Commer. Cleaning Servs.

v. Colin Serv. Sys., 271 F.3d 374 (2d Cir. 2001). Section 1964 requires the plaintiff to allege
" racketeering activity" through o ne of the predicate offenses listed in § 196 1. Here, Lim tung
alleges RICO violations through the predicate offenses of mail fraud under 18 U.S.C. § 1341 and
wire fraud under 18 U.S.C. § 1343. (See Comp!. at if 1.)
Limtung' s RICO claims are subject to the pleading standards of Ru le 9(b). Under Rule
9(b), to allege fraud sufficient to withstand a motion to dismiss under Rule l 2(b), a complaint
must "'specify the statements it claims were false or misleading, give particulars as to the respect
in which plaintiffs contend the statements were fraudu lent, state when and where the statements
were made, and identify those responsibl e for the statements. "' Moore v. Paine Webber, Inc.,
189 F.3d 165, 172 (2d Cir. 1999) (quoting McLaughlin v. Anderson, 962 F .2d 187, 191 (2d Cir.
1992)). Rule 9(b) " applies to RICO claims for which fraud is the predicate illegal act," Moore,
189 F.3d at 172, including where the RICO predicate offense is mail or wire fraud, see, e.g.,

Powers v. British Vita, P.L. C., 57 F.3d 176, 184 (2d Cir. 1995). Such a complaint must "identify
the purpose of the mailing within the defend ant's fraudulent scheme," McLaughlin, 962 F.2d at
191 , and "allege facts that give rise to a strong inference of fraudulent intent," San Leandro

Emergency Med. Group Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801 , 812 (2d Cir.

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1996). " [T]o comply with Rule 9(b), ' the complaint must: (1) specify the statements that the
plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the
statements were made, and (4) explain why the statements were fraudulent."' Am. Fed'n of

State, Cnty. & Mun. Emps. Dist. Council 37 Health & Sec. Plan v. Bristol-Myers Squibb Co.,
948 F. Supp. 2d 338, 346 (S.D.N.Y. June 3, 2013) (quoting Lerner v. Fleet Bank, NA., 459 F.3d
273 , 290 (2d Cir. 2006)). "[W]here multiple defendants are accused of mai l or wire fraud,
plaintiffs must plead with particularity as to each defendant .... " United States Fire ins. Co. v.

Un ited Limousine Serv., 303 F. Supp. 2d 432, 433-44 (S.D.N.Y. Feb. 6, 2004) (internal citations
omitted); accord Spiteri v. Russo, No. 12-CY-2780 (MKB), 2013 U .S. Dist. LEXIS 128379
(E.D.N .Y. Sept. 7, 2013).
Here, Limtung has fai led to plead with particularity the mai l and wire fraud predicates to
RICO in contravention of Rule 9(b). Limtung's lengthy complaint is replete with conclusory
allegations of " illegal assignments," " criminal schemes," "false affidavits," and " intrinsic and
extrinsic fraud. " (See generally Comp!.) However, Limtung fails to either "explain why the
statements were fraudulent," Bristol-Myers Squibb Co., 948 F. Supp. 2d at 346, or "allege facts
that give rise to a strong inference of fraudulent intent," San Leandro Emergency Med. Group

Profit Sharing, 75 F.3d at 8 12. One representative paragraph from the complaint reads:
The Defendants acted with other entities with respect to their Criminal Scheme to
launder illegally obtained and invalid Note and Mortgage that encumber the
Plaintiffs property with an address of 3 1-70 Crescent Street, Astoria, NY 11 106
(Block 549/Lot 49) through illegal assignments of Note and Mortgage, and
submission of false Affidavits and Affirmations, in order to justify foreclosing and
selling Plaintiffs property, and to prevent the Plaintiff fro m asserting his rights and
litigating the Home Foreclosure.
(Comp!.

at~

87.) Limtung further alleges that the defendants subm itted these and other

"fraudulent documents" to the state court in the fo reclosure action, (id.

7

at~

87), and that "the

Defendants assisted in, implemented and took part in" these actions, (id. at~ 85.) Limtung avers
that defendants
had reason to know that the Note and Mortgage that encumbered the Plaintiff
property ... have been ill egally securitized and unlawfully sold to multiple parties,
and that none of the Defendants can show proper receipt, possession, transfer,
negotiations, and assignment of the Plaintiffs original Promi ssory Note and
Mortgage, resulting in imperfect security interests and claims or have the ability to
establi sh th at the Mortgage that secured the Note was legall y or properly acquired.

(Id.

at~

75.) Through such statements, Lim tung appears to reveal his own lack of understanding

of the mortgage assignment process, rather than make any particul arized allegation of fraud.
Thus, Limtung has fa iled to meet the pleading standards of Rule 9(b). Accordi ngly, defendants'
motion to di smiss Limtung's RICO claims fo r fa ilure to state a claim under Rules 12(b)(6) and
9(b) is granted.
IV.

Leave to Amend

Leave to amend "shall be freely given when justice so requires," Fed. R. Civ. P. l 5(a),
and "a prose litigant in particular should be afforded every reasonable opportunity to
demonstrate that he has a valid claim," Nielsen v. Rabin, 746 F.3d 58, 62 (2d Cir. 20 13); accord

Ashmore v. Prus, 510 F. App 'x. 47, 49 (2d Cir. 2013) ("District courts should generally not
d ismi ss a prose complaint without granting the plaintiff leave to amend."); Cuoco v. Moritsugu,
222 F.3d 99, 11 2 (2d Cir. 2000) (prose plaintiffs should be given an opportunity to amend if "a
liberal reading of the complaint gives any indi cation that a valid claim might be stated"). The
Supreme Court has interpreted Rule 15 to mean that
" [i]n the absence of any apparent or declared reason - such as undue delay, bad
faith or dilatory motive on the pa11 of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposi ng
party by virtue of all owance of the amendment, futility of amendment, etc. - the
leave should , as the rules require, be 'freely given. "'

8

Fomanv. Davis,37 1U.S. 178,182(1962);seealsoRuotolov. CityofNewYork,5 14F.3d 184,
191 (2d Cir. 2008).
Here, Limtung fai ls to plead his RICO claims with sufficient particularity to satisfy the
requirements of Rules 9(b) and 12(b)(6). However, in light of his prose status and the fact that
he has yet to amend his complaint, Limtung is granted thirty (30) days leave to amend to plead
his RICO claims in satisfaction of Rules 9(b) and 12(b)(6). Specificall y, Limtung must "( I)
specify the statements that [he] contends were fraudulent, (2) identify the speaker, (3) state
where and when the statements were made, and (4) explain why the statements were fraudulent."

Lerner, 459 F.3d at 290. Should Lim tung seek to avail himself of this opportunity, he shall file a
proposed first am ended complaint, so captioned and bearing the same docket number, and shall
plead sufficient facts to support any such claim. Limtung shall also file a brief memorandum of
law as to why such an amendment raises a proper claim and is not futile. In the event Limtung
seeks to amend, defendants will be given an opportunity to address whether the proposed motion
meets the pleading requirements of Rules 9(b) and 12(b)(6).

CONCLUSION
For the reasons set forth above, the moving defendants' motions to dism iss (Doc. Nos.
39, 40, 42.) are granted. Limtung's FCPA claims are dismissed with prej udice. Limtung is
granted thirty (30) days from the date of this Memorandum and Order to seek leave to amend his
complaint consistent with this Court's ruling.
Although Limtung paid the filing fee to initiate this action, the Court certifies pursuant to
28 U .S.C. § l 9 l 5(a)(3) that any appeal from this Order would not be taken in good faith, and
therefore, in forma pauper is status is denied for purpose of an appeal. See Coppedge v. Un ited

States, 369 U.S. 438 , 444-45 (1962).

9

The Clerk of Court is respectfully directed to mail a copy of this Memorandum and Order
to plaintiff Hin Lim tung, prose, at the address listed on the docket and note the mailing on the
docket.

SO ORDERED.

s/Roslynn R. Mauskopf
ROSL YNN R . MAUSKOPF
United States District Judge
Dated : Brooklyn, New York
~ zs, 20 11

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