Wheeler v. Law Offices of John D. Clunk Co., L.P.A.

Filing 4

Memorandum Opinion and Order: Plaintiff's Application to Proceed In Forma Pauperis (Doc. No. 2 ) is denied and this action is dismissed pursuant to 28 U.S.C. Section 1915(e). Plaintiff may reopen this case within 10 days of the date of t his order by first paying the full filing fee of $400.00 and, after payment of the fees, by filing a motion to reopen this case that demonstrates that the plaintiff has standing to bring this action. The Court will not accept any additional docu ments for filing, including the application to reopen, until the filing fee is paid in full. Any document submitted prior to payment of the full filing fee will be returned to the plaintiff unfiled. Moreover, if an application to reopen is not filed with 10 days of the date of this order, and if the application does not adequately demonstrate that plaintiff has standing to bring this action, this case will be dismissed with prejudice and will not be restored to the Court's docket, regardless of whether the full filing fee is paid. Pursuant to 28 U.S.C. Section 1915(a)(3), an appeal from this decision could not be taken in good faith. (Related Doc # 1 , 3 , 2 ). Judge Sara Lioi on 4/24/2015. (P,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

EUGENE WINSTON WHEELER, JR.,

PLAINTIFF,

vs.
LAW OFFICES OF JOHN D. CLUNK CO.,
LPA,

DEFENDANT.

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CASE NO. 5:14-cv-2362

JUDGE SARA LIOI
MEMORANDUM OPINION
AND ORDER

Pro se plaintiff Eugene Winston Wheeler (“plaintiff”) filed this action under the
Fair Debt Collection Practices Act, 15 U.S.C. § 1692(a)(1) and (5), and the Ohio Consumer Sales
Practices Act, Ohio Rev. Code § 1345.02(B)(10), against the Law Offices of John D. Clunk Co.,
LPA (“defendant”). In the complaint, plaintiff alleges defendant represents One West Bank in a
foreclosure action against Robert D. Anthony in which One West Bank allegedly lacks standing.
Plaintiff is named in that foreclosure action as an interested party. In the instant lawsuit, he seeks
monetary damages and injunctive relief “to prevent future injurious conduct by the defendant.”
(Doc. No. 1 at 8.) He has also filed a Motion for Leave to Amend Complaint (Doc. No. 3) to add
ten John/Jane Does, and a Motion to Proceed In Forma Pauperis (Doc. No. 2). For the reasons
set forth below, the motions are denied, and this case is dismissed.

I. Background
Although this case is recently filed, it has its roots in a state court action with a
long and tortured procedural history.1 Robert D. Anthony (“Anthony”) purchased the property at
1296 River Woods Drive, Hinkley, Ohio 44233. See OneWest Bank v. Wheeler, No. 1:15-CV589 (N.D. Ohio filed Mar. 25, 2015) (state court foreclosure action No. 14CIV0291 removed to
federal court on the eve of trial). On April 6, 2007, Anthony signed a promissory note in favor of
All State Home Mortgage Corporation (“All State”) in the amount of $1,000,000.00 plus 6.25%
interest. The note was secured by a mortgage on the River Woods property. Beginning June 1,
2007, Anthony was required to make monthly mortgage interest payments of $5,208.33. On June
17, 2017, Anthony’s payments would increase to $7,309.28 to cover interest and principal. The
mortgage deed listed Mortgage Electronic Registration Systems, Inc. (“MERS”) as the
mortgagee and nominee for the lender.
At some point in 2007, Anthony defaulted on his payments. On September 19,
2008, Anthony anticipated the impending foreclosure and quitclaimed his interest in the property
to OTM Investments, Inc., an Ohio for profit corporation (“OTM”). OTM, however, did not
assume responsibility for payment of the mortgage, which remained in Anthony’s name. The
transfer applied only to the legal title on the property. Plaintiff is listed as the statutory agent for
OTM. OTM then immediately quitclaimed its interest in the property to plaintiff. The quitclaim

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Much of the background summarized herein has been obtained from public records available through the websites
of various clerks of court, of which this Court may take judicial notice pursuant to Fed. R. Evid. 201. See, United
States ex rel. Dingle v. BioPort Corp., 270 F. Supp. 2d 968, 972 (W.D. Mich. 2003) (“Public records and
government documents are generally considered ‘not to be subject to reasonable dispute.’ … This includes public
records and government documents available from reliable sources on the Internet.”) (internal quotation marks and
citations omitted); Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir. 1999) (“Courts may also consider
public records, matters of which a court may take judicial notice, and letter decisions of governmental agencies.”),
overruled on other grounds by Swierkiewicz v. Sorema N.A., 534 U.S. 506, 122 S. Ct. 992, 152 L. Ed. 2d 1 (2002).
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deed from OTM to plaintiff was signed on October 3, 2008; however, it was not recorded until
November 14, 2008. There is no indication that there was consideration for the transfer.
IndyMac filed a foreclosure action against Anthony, OTM, and others in the
Medina County Court of Common Pleas on November 5, 2008. (Case No. 08CIV2019.)
IndyMac attached copies of the note and the mortgage to the complaint, but did not provide
documentation of an assignment of the mortgage. County property records still showed the
mortgage to be held by All State. Anthony, acting pro se, filed an answer asserting that IndyMac
was not the lawful holder of the note nor the assignee of the mortgage and, therefore, had no
legal right to foreclose. IndyMac moved for summary judgment and attached an assignment of
mortgage dated November 14, 2008, by which MERS, on behalf of All State, assigned its
interest in the mortgage to IndyMac. Anthony opposed the motion, but on June 17, 2009, the
Medina County Court of Common Pleas granted judgment against Anthony in the amount of
$1,000,000.00 plus interest. Anthony filed an appeal of that judgment on July 17, 2009. The
judgment was affirmed on August 4, 2011.
IndyMac executed an assignment of the note and mortgage to OneWest Bank on
October 7, 2009. That assignment was recorded on February 24, 2010. In the meantime,
IndyMac moved forward with the sheriff’s sale of the property. Anthony filed a motion for relief
from judgment on July 17, 2009 and again on August 5, 2009. The motions were denied, and the
property was scheduled for sheriff’s sale on September 24, 2009; but the sheriff’s sale was
canceled after Anthony filed for bankruptcy on September 17, 2009. See In re Anthony, No. 0954217-mss (Bankr. N.D. Ohio filed 9/17/09). The bankruptcy was dismissed in December 2009
when Anthony did not file the appropriate schedules.
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The Sheriff’s sale was rescheduled for March 11, 2010. On March 10, 2010, the
day before the scheduled sale, Anthony filed his second bankruptcy, staying the foreclosure
action. See In re Anthony, No. 10-51032-mss (Bankr. N.D. Ohio filed 3/10/10). He did not file
any of the ordered schedules and the bankruptcy was dismissed on April 21, 2010.
The sheriff’s sale was rescheduled for August 19, 2010. On August 18, 2010,
Anthony filed a third bankruptcy action. See In re Anthony, No. 10-53928-mss (Bankr. N.D.
Ohio filed 8/18/10). The court ruled that the automatic stay was inapplicable to the property that
was the subject of the foreclosure and that Anthony was not statutorily eligible to file for
bankruptcy under Chapter 13. Anthony was given two weeks to convert his bankruptcy to
another chapter but he did not do so. On the motion of the Trustee, the bankruptcy was dismissed
and sanctions were imposed against Anthony on November 24, 2010. Anthony was barred from
filing another bankruptcy action for 180 days.
The sheriff’s sale was rescheduled yet again for January 20, 2011. Anthony could
not file another bankruptcy due to the 180-day filing sanction imposed by the court. Rather,
plaintiff filed a bankruptcy action on January 19, 2011, one day before the scheduled sheriff’s
sale. See in re Wheeler, No. 11-50169-mss (Bankr. N.D. Ohio filed Jan. 19, 2011). OneWest
Bank filed a motion requesting that the real property be removed from the bankruptcy, claiming
plaintiff was not obligated on the debt for that property and the property had no equity since
Anthony had stopped making payment on it in 2007. The bankruptcy court lifted the stay on
February 23, 2011, and ordered that no stay would be imposed for any future bankruptcy
proceeding as it relates to an in rem action against the subject real property for a period of two
years. The court specified that OneWest should file a copy of the order with the Medina County
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Recorders Office so that any sheriff presented with a subsequent bankruptcy petition filed in
contradiction to that order for the purpose of stopping an otherwise lawfully scheduled sheriff’s
sale may disregard such petition and proceed with the scheduled sale. On February 28, 2011, the
bankruptcy court dismissed the case and plaintiff was forbidden to file any future bankruptcy
action unless he first paid in full the outstanding filing fees in the dismissed action.
The sheriff’s sale was rescheduled for November 17, 2011. This time, the
property was sold at auction and purchased by One West Bank. The sale was confirmed on
January 9, 2012. A writ of possession was issued by the common pleas court on June 5, 2012.
That writ was not returned, however, because Anthony filed an appeal to the Ohio Supreme
Court on June 13, 2012 and requested a stay. The Supreme Court granted the request on July 25,
2012.
On December 31, 2012, the Ohio Supreme Court reversed the decision of the
Court of Appeals and remanded the action to the trial court for further proceedings. In essence,
the Supreme Court held that IndyMac was not the holder of the mortgage when the foreclosure
was filed, and although a valid assignment of the mortgage was filed later, IndyMac lacked
standing when it filed the lawsuit. Because standing is required to invoke the court’s jurisdiction,
a litigant cannot cure lack of standing after commencement of the action by obtaining an interest
in the property that is subject to the litigation and substituting itself as the real party in interest.
See Fed. Home Loan Mort. Corp. v. Schwartzwald, 979 N.E.2d 1214, 1219-23 (Ohio 2012). In
light of the Supreme Court’s decision, IndyMac filed a motion to vacate judgment and dismiss
without prejudice. The trial court granted that motion and dismissed the case without prejudice
on April 8, 2013.
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On March 13, 2014, OneWest Bank refiled the foreclosure action in the Medina
County Court of Common Pleas against Anthony, Wheeler, OTM and other interested parties.
(Case No. 14CIV0291.) Both Wheeler and Anthony filed motions to dismiss. In his motion,
Wheeler claimed OneWest and IndyMac lacked standing because the assignments were “robosigned” by Erica Johnson-Seck. He also claimed that the attorneys for John D. Clunk Co., LPA
helped to perpetrate fraud on the title of the property. Medina County Common Pleas Court
Judge James L. Kimbler denied the motion on June 27, 2014, concluding that OneWest was the
holder of the promissory note when the foreclosure case was filed, that the assignments were
valid, and that OneWest had standing to pursue foreclosure. The case was ultimately set for trial
on March 27, 2015, after several continuances were granted. At 4:13 p.m. on March 26, 2015,
the day before trial, plaintiff filed a notice of removal of the case to federal court. That action,
No. 1:15-cv-589, is currently pending before Chief Judge Solomon Oliver, Jr.
Wheeler has now filed the within action against the Law Offices of John D. Clunk
Co., LPA. In this action, he again asserts that the attorneys employed by the John D. Clunk Co.,
LPA helped to perpetrate a fraud on the property by filing foreclosure actions when they know
that their clients lack standing to file them. He contends that OneWest and IndyMac lack
standing because they used a “robo-signer” to execute mortgage assignments and those mortgage
assignments were invalid. He also contends OneWest did not register as a foreign corporation
before maintaining an action in the Medina County Court of Common Pleas. Finally, he contends
that the law firm filed the second foreclosure action in 2014 knowing the statute of limitation had
expired. He claims the law firm used false and misleading statements and engaged in
unconscionable acts to collect the mortgage debt in violation of the Fair Debt Collection
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Practices Act (“FDCPA”). He asserts a claim for malicious prosecution against the law firm for
initiating proceedings in which its client lacks standing, and contends the defendant engaged in
unfair and deceptive sales practices by using robo-signers to assign the mortgage, in violation of
Ohio Rev. Code §§ 1345.02 and 1345.03. He claims he is entitled to monetary damages in the
amount of $1,000,000.00 and injunctive relief to prevent future injury by defendant.
Plaintiff also filed a Motion to Proceed In Forma Pauperis. (Doc. No. 2.) In his
motion, he indicates he is not employed, collects social security disability in the amount of
$721.00 per month, and receives $277.00 per month in public assistance. He claims to have only
$10.00 in his checking account, no money in savings, and no other sources of income. Oddly,
given that his only connection to this case is a property interest in a home valued at
$1,000,000.00, which was quitclaimed to him by Anthony in 2008, he indicates on his in forma
pauperis application that he has no home, and owns no real estate. In the pleading, he contends
he resides in this $1,000,000.00 home; however, in his in forma pauperis application, he
indicates he pays $500 in rent. Plaintiff is not obligated on the mortgage and indeed the mortgage
and taxes have not been paid by plaintiff or Anthony since 2007. Plaintiff offers no explanation
of why (and to whom) he would pay rent.
In addition, plaintiff failed to disclose his interest in OTM Investments in his
application to proceed in forma pauperis. On the website of the Ohio Secretary of State, Wheeler
is listed as the statutory agent for this company. But it is apparent from the pleading that he has
more than a ministerial interest in this corporation. Indeed, upon obtaining title to the River
Woods property from Anthony, OTM immediately quitclaimed the property to plaintiff with no

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apparent consideration exchanged. He has not disclosed his real interest in this corporation in his
in forma pauperis application.
Moreover, OTM Investments is not plaintiff’s only business interest. The Ohio
Secretary of State shows he has active interests in GENO Funding Ltd., TBI, Inc., America’s
Choice Builders, Inc., and O N E Distributors, LLC. GENO Funding lists its purpose as
“management” and lists its principal business address as 1296 River Woods Dr., Hinkley, Ohio
44233, the property that is the subject of this action. Plaintiff is listed as the statutory agent. TBI
claims its business purpose is to do corporate business from the state of Ohio in construction and
investments on a corporate level. Plaintiff is an incorporator and an officer of the company. This
company also lists its principal place of business as 1296 River Woods Dr., Ste. 1D, Hinkley,
Ohio 44233. Plaintiff is listed as the statutory agent for O N E Distributors, which lists no
corporate purpose. In addition, plaintiff registered a trade name for himself, for the Eugene
Winston Wheeler Jr. Estate, and for Nyah A. Wheeler. For each of these, he lists the purpose of
the business as engaging in lawful acts and/or business activities to buy, sell, loan, pledge and
dispose of real estate and real property. The business address listed for each trade name is 1296
River Woods Dr., Hinkley, Ohio 44233. It appears that plaintiff has other assets and/or sources
of income that he did not disclose on this application.
Finally, Plaintiff removed the state court foreclosure action to federal court on
March 25, 2015 and paid the full filing fee of $400.00. If Plaintiff indeed has no source of
income other than social security disability and public assistance, has no money in his checking
or savings account, and has expenses that exceed his limited income, he needs to explain how he
was able to pay the filing fee to remove the state foreclosure case.
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This Court does not take lightly a litigant’s request for in forma pauperis status.
Proceeding in forma pauperis is a privilege, and not a right. Wilson v. Yaklich, 148 F.3d 596, 603
(6th Cir. 1998); Weaver v. Toombs, 948 F.2d 1004, 1008 (6th Cir. 1991); Marshall v. Beshear,
No. 3:10CV–663–R, 2010 WL 5092713, at *3 (W.D. Ky. Dec. 7, 2010). “[T]he court system
depends upon the honesty and forthrightness of applicants to ensure that the privilege is not
abused.” Chung v. Dushane, No. 03 C 5955, 2003 WL 22902561, at *2 (N.D. Ill. Dec. 9, 2003);
Kirkland v. Donahoe, No. 1:11–cv–048, 2012 WL 2360862, at *3 (S.D. Ohio June 20, 2012).
Plaintiff’s in forma pauperis application omits pertinent asset and income information. The
statute authorizing litigants to proceed in forma pauperis provides a consequence for failing to
disclose pertinent financial information: “the court shall dismiss the case at any time if the court
determines that the allegation of poverty is untrue.” 28 U.S.C. § 1915(e)(2)(A). Plaintiff’s in
forma pauperis application is, therefore, denied and this case is dismissed.
Plaintiff may reopen this case by first paying the full filing fee of $400.00 within
ten (10) days of the date of this order and then filing an Application to Reopen the case. The
Court will not accept any additional documents for filing, including an application to reopen,
until the filing fee is paid in full. If an application to reopen is not filed with ten (10) days of the
date of this order, this action will be dismissed with prejudice.
Moreover, the Court has serious concerns that plaintiff lacks standing to assert
claims pertaining to the validity of the mortgage between Anthony and OneWest Bank, or to
challenge OneWest’s efforts to collect the loaned amount from Anthony. Plaintiff does not
appear to be obligated on the mortgage and therefore is not a debtor. The first foreclosure
judgment was only against Anthony. A party must assert his or her own legal rights and interests,
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and cannot rest his or her claim to relief on the legal rights or interests of third parties. Warth v.
Seldin, 422 U.S. 490, 499 (1975); Allstate Ins. Co. v. Wayne County, 760 F.2d 689, 693 (6th Cir.
1985). The fact that plaintiff may be collaterally affected in some way by the adjudication of
Anthony’s rights does not necessarily extend the Court’s Article III powers to him. Allstate Ins.
Co., 760 F.2d at 692. Further, defects in subject matter jurisdiction cannot be waived by the
parties and may be addressed by a court on its own motion at any stage of the proceedings. Curry
v. U.S. Bulk Transport, Inc., 462 F.3d 536, 539-40 (6th Cir. 2006); Owens v. Brock, 860 F.2d
1363, 1367 (6th Cir. 1988). Plaintiff has the burden of establishing subject matter jurisdiction to
proceed with the case, and that includes establishing standing to assert the claims included in the
pleading. Madison-Hughes v. Shalala, 80 F.3d 1121, 1130 (6th Cir. 1996). Lack of subject
matter jurisdiction is a non-waivable, fatal defect. Von Dunser v. Aronoff, 915 F.2d 1071, 1074
(6th Cir. 1990).
Consequently, if plaintiff pays the full filing fee within ten days, he is ordered to
show cause in his application to reopen why he has standing to bring this action. If the
application to reopen does not adequately establish plaintiff’s standing to bring these claims, the
action will be dismissed with prejudice regardless of whether the filing fee is paid.

II. Conclusion
For all the foregoing reasons, plaintiff’s Application to Proceed In Forma
Pauperis (Doc. No. 2) is denied and this action is dismissed pursuant to 28 U.S.C. § 1915(e).
Plaintiff may reopen this case within ten (10) days of the date of this order by first paying the full
filing fee of $400.00 and, after payment of the fees, by filing a motion to reopen this case that
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demonstrates that the plaintiff has standing to bring this action. The Court will not accept any
additional documents for filing, including the application to reopen, until the filing fee is paid in
full. Any document submitted prior to payment of the full filing fee will be returned to the
plaintiff unfiled. Moreover, if an application to reopen is not filed with ten (10) days of the date
of this order, and if the application does not adequately demonstrate that plaintiff has standing to
bring this action, this case will be dismissed with prejudice and will not be restored to the
Court’s docket, regardless of whether the full filing fee is paid. Pursuant to 28 U.S.C. §
1915(a)(3), an appeal from this decision could not be taken in good faith.

IT IS SO ORDERED.

Dated: April 24, 2015
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE

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