Johnson et al v. BAC Home Loans Servicing, LP et al

Filing 91

ORDER denying 88 Motion for Reconsideration. Counsel is reminded to read the order in its entirety for further information. Signed by Senior Judge James C. Fox on 1/18/2012. (Edwards, S.)

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NORTH CAROLn'l"A

WESTERN DIVISION

No.5:1O-CV-271-F

ROSA H. JOHNSON,
EDGAR W. JOHNSON,
Plaintiffs,
v.
BAC HOME LOANS SERVICING, LP FKA
COUNTRYWIDE HOME LOANS SERVICn-...rG
LP, THE LAW FIRM OF HUTCHENS,
SENTER & BRITTON, P.A., SUBSTITUTE
TRUSTEE SERVICES, n-...rc., DEBORAH N.
HOOKER, c.T. SALYER, JOHN A.
MUNDULAK,
Defendants.

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ORDER

This matter is before the court on Plaintiffs' Motion to Reconsider pursuant to Rule 59(e) of
the Federal Rules of Civil Procedure. [DE-88]. Defendants BAC Home Loans Servicing, LP,
Substitute Trustee Services, Inc., The Law Finn of Hutchens, Senter & Britton and Deborah N.
Hooker, C.T. Salyer and John A. Mundulak have responded [DE-90] and the time for filing a reply
has expired. This motion is therefore ripe for ruling.

I. PROCEDURAL HISTORY
On September 29,2011, the court allowed the motions to dismiss the amended complaint
pursuant to 12(b)(6) filed by Defendant Substitute Trustee Services, Inc. ("STS") [DE-61],
Defendant The Law Finn of Hutchens, Senter & Britton, P.A. ("HSB") [DE-62], and Defendants
Deborah N. Hooker, C.T. Salyer and John A. Mandulak (collectively, "the Individual Defendants")

[DE-73].1 [DE-86].

Plaintiffs Rosa H. Johnson and Edgar W. Johnson ("Plaintiffs" or "the

Johnsons"), proceeding pro se, now move this court pursuant to Rule 59 ofthe Federal Rules of Civil
Procedure to reconsider its September 29,2011 decision ("the Order").2 The relevant facts of this
case are set forth in this court's decision in Johnson v. BAC Home Loans Servicing, LP, No.
5:10-CV-271-F, _ F. Supp. 2d _,2011 U.S. Dist. LEXIS 112010,2011 WL 4550142 (E.D.N.C.
Sept. 29,2011) and will not be reiterated here.

II. STANDARD OF REVIEW
Rule 59(e) permits a court to alter or amend a judgment. See FED. R. Cry. P. 59(e).

In

particular, Rule 59(e) permits revisitation of a prior decision in three circumstances: "(1) to
accommodate an intervening change in controlling law; (2) to account for new evidence not available
[previously]; or (3) to correct a clear error of law or prevent manifest injustice." Sloas v. CSX

Transp., Inc., 616 F.3d 380, 386 n.2 (4th Cir. 2010) (alternation added & citation omitted).
Consequently, "[a] Rule 59(e) motion is not intended to allow for reargument ofthe very issues that
the court has previously decided," Delong v. Thompson, 790 F. Supp. 594, 618 (E.D. Va. 1991), and
"is [not] intended to give an unhappy litigant one additional chance to sway the judge." Durkin v.

Taylor, 444 F. Supp. 879, 889 (E.D. Va. 1977). Accord Exxon Shipping Co. v. Baker, 554 U.S. 471,
486 n.5 (2008) (explaining Rule 59(e) "may not be used to relitigate old matters, or to raise
arguments or present evidence that could have been raised prior to the entry ofjudgment") (citation
omitted); Brogdon v. Nat'l Healthcare Corp., 103 F. Supp. 2d 1322, 1338 (N.D. Ga. 2000) ("Parties

In that same order, the court denied the motion to dismiss the amended complaint pursuant to
12(b)(5) [DE-71] filed by Defendants Deborah N. Hooker and John A. Mandulak and denied as moot
Plaintiffs' motion to dismiss Defendant BAC's counterclaim [DE-80].
1

2A motion for reconsideration under Rule 59(e) "must be filed no later than 28 days after the entry
of the judgment." FED R. CIY. P. 59(e). Plaintiff filed this motion on October 11,2011, twelve days
after the Order. Thus, Plaintiffs' motion is timely under Rule 59(e).

[] may not employ a motion for reconsideration as a vehicle to present new arguments or evidence
that should have been raised earlier, introduce novel legal theories, or repackage familiar arguments
to test whether the Court will change its mind."). Although district courts enjoy considerable
discretion in granting or denying a motion under Rule 59(e), "reconsideration of a judgment after its
entry is an extraordinary remedy which should be used sparingly." Jarmak v. Ramos, No.
6:1O-CV-48, 2011 U.S. Dist. LEXIS 107031, at *3,2011 WL 4381496, at *1 (W.D. Va. Sept. 21,
2011)(quoting 11 Wright et aI., Federal Practice and Procedure § 2810.1 (2d ed. 2011 )). AccordPac.
Ins. Co. v. Am.. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998) (describing reconsideration
of a judgment as "an extraordinary remedy").

III. DISCUSSION
Plaintiffs set forth the following grounds in support of their motion: (l) allegations in the
amended complaint were sufficiently set forth to state a claim under the Fair Debt Collection
Practices Act ("FDCPA"), 15 U.S.c. § 1692 et seq.; (2) FDCPA violations require viewing Plaintiffs'
allegations "through the law as it pertains to mortgage backed securities investment vehicles;" (3)
there is new evidence available which supports their claims; and (4) manifest injustice would occur
ifthe amended complaint is dismissed. PIs.' Mem. Supp. Mot. Reconsider at 2-4 [DE-89]. The court
addresses each in turn.
Plaintiffs' first two arguments for relief do not fall under any ofthe three situations identified
by the Fourth Circuit for altering a judgment under Rule 59(e). In particular, the first argument is
simply a reassertion of the same argument previously considered and decided by the court. See
Durkin, 444 F. Supp. at 889. In Plaintiffs' second argument, Plaintiffs suggest the application of
securities law also governs their claims ofimproper debt collection. Aside from the obvious fact that
such claims are governed solely by the FDCPA, see 15 U.S.C. § l692(e) (FDCPA established by

Congress to "eliminate abusive debt collection practices"), Plaintiffs cite no authority on how
application of a different law would impact the court's analysis of whether Plaintiffs stated a claim
under the FDCPA. More importantly, "Rule 59(e) motions are 'aimed at reconsideration, not initial
consideration.'" Nat'l Ecological Found. v. Alexander, 496 F.3d 466,477 (6th Cir. 2007) (citation
omitted). See also Cochran v. Quest Software, Inc., 328 FJd 1, 11 (1 st Cir. 2003) (noting a party,
on a motion for reconsideration, "should not be allowed to switch from theory to theory like a bee
in search of honey").
Plaintiffs' third basis for bringing the motion is that new evidence exists which was not
previously available at the time the September 2011 decision was rendered. Specifically, Plaintiffs
contend there is new evidence
demonstrating that Plaintiff does not owe a debt to Defendant BOA [Bank of
America][3] because Defendant BOA is not the owner of the note, not the Holder of
the note, nor has any legal standing to sue in foreclosure. Moreover, new evidence
indicates that there were multiple payment sources for the note, including insurance
paid upon a borrower's default, federal bailout monies and investment funds. This
documentation indicates that Plaintiffs do not owe Defendants any debt . . ..
Additionally, ... Plaintiffs' mortgage was processed in the MERS system which has
been held defective by courts.
PIs.' Mem. at 3-5. The court finds, however, that this new evidence does not necessitate
reconsideration of the Order. First, any allegations regarding the propriety of the underlying
foreclosure action, the availability of other funds to pay offthe note and the operation ofMERS are
irrelevant to Plaintiffs' FDCPA claims and thus cannot constitute new evidence. Second, as to
evidence supporting Plaintiffs' allegations that Defendant BAC is not the owner or holder ofthe note,
Plaintiffs offer no explanation for their failure to submit these new allegations earlier. See also

Pacific Ins. Co. v. Am. Nal'l Fire Ins. Co., 148 F.3d 396, 404 (4th Cir. 1998) (stating that where a
According to Plaintiffs, BOA purchased Countrywide Home Loans, Inc. and BOA's subsidiary,
Defendant BAC, became the servicer ofthe note. Am. CompI. ~ 20.

3

Rule 59(e) motion relies upon new evidence, the party must offer a "legitimate justification" for not
providing the evidence earlier». Indeed, in light 0 fthe underlying foreclosure action, the loan details
which Plaintiffs wish to proffer as new evidence would have been available to them well before this
action commenced. As a result, the motion for reconsideration must be denied. See Cureton v.

Cianbro Corp., No. JFM-06-2303, 2007 U.S. Dist. LEXIS 7388, at *5, 2007 WL 397025, at *2 (D.
Md. Jan. 30, 2007) (denying plaintiffs motion to reconsider order dismissing complaint for failure
to state a claim based on "additional particularized allegations" where plaintiff "provid[ed] no
explanation for why these new facts were not submitted earlier"). See also Bingham v.

Massachusetts, No. 08-11770-GAO, 2009 U.S. Dist. LEXIS 56937, at *4 (D. Mass. May 6, 2009)
(upholding order dismissing amended complaint where evidence presented did not qualify as "newly
discovered" within the meaning of Rule 59(e) where evidence was obtainable prior to the rendering
of the judgment). Furthermore, Plaintiffs' conclusory assertion that BOA is not the owner or holder
of the note is belied by Plaintiffs' allegation in their amended complaint that Defendant BAC failed
to properly credit two mortgage payments. Am. Compi.

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24. A party seeking a motion for

reconsideration must "set forth facts or law of a strongly convincing nature to induce the court to
reverse its prior decisions," Decker Coal Co. v. Hartman, 706 F. Supp. 745, 750 (D.Mont. 1988).
Plaintiff has failed to set forth such facts or law.
Finally, Plaintiffs assert a manifest injustice will occur if the court's judgment is not
reconsidered because they
have demonstrated that new laws and new facts applied to this matter [which]
indicate that Defendants had no legal standing to sue in foreclosure and knew that
they lacked such standing thereby demonstrating that they engaged in, at worst,

misrepresentation and deception in collecting the mortgage or, at best, recklessness.

PIs.' Mem. at 4. As state above, the propriety of the underlying foreclosure action is not before this

court. Plaintiffs have not presented evidence of changes in the controlling law under 15 U.S.c. §
1692 nor have they provided justification for their failure to allege new facts earlier. Plaintiffs have
not presented any evidence that by granting their motion, the court will prevent a manifest injustice.
Plaintiffs' amended complaint was dismissed without prejudice, affording Plaintiffs the opportunity
to pursue their state court claims, which are premised on the state foreclosure action that served as
the basis for their FDCPA claim, in state court.

IV.

CONCLUSION

For the foregoing reasons, Plaintiffs' Motion to Reconsider pursuant to Rule 59(e) of the
Federal Rules of Civil Procedure [DE-88] is DENIED.

SO ORDERED.
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This, the ~ day of January, 2012.