Redmond et al v. Polunsky et al

Filing 3

MEMORANDUM OPINION AND ORDER. It is therefore ORDERED that Plaintiffs' claims against all of the Defendants are DISMISSED SUA SPONTE WITHOUT PREJUDICE for lack of subject matter jurisdiction. Although the Court is without jurisdiction to rule on the subject matter of this case, the Court hereby REFERS this lawsuit to the United States Attorney's Office for investigation. Pursuant to Rule 60(a) of the Fed. R. Civ. P., the Court enters this Memorandum Opinion and Order in place of the prior Memorandum Opinion and Order (Dkt. # 2 ), to reflect the appropriate parties and Order of the Court. Signed by District Judge Amos L. Mazzant, III on 2/21/2023. (mcg, )

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United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

HOWARD JAMES REDMOND and
SHASHONAH DENEEN REDMOND
Plaintiffs,
v.
ALLAN B. POLUNSKY, trustee, et al.
Defendants.

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Civil Action No. 4:20-mc-00204-ALM
Judge Mazzant

MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiffs’ complaint which seeks confirmation of an alleged
arbitration award pursuant to 9 U.S.C. § 9 and registration of a judgment in this court pursuant to
28 U.S.C. § 1963 (Dkt. #1). Having reviewed the complaint, the Court finds that it lacks subject
matter jurisdiction over this matter and dismisses this case sua sponte.
BACKGROUND
Plaintiffs Howard James Redmond and Shashonah Deneen Redmond (“Plaintiffs”),
proceeding pro se, filed this lawsuit against Allan B. Polunsky, Trustee, BBMC Mortgage, Fannie
Mae, Freddie Mac, MERS Holding Corp., and Flagstar Bank (collectively “Defendants”) seeking
to confirm a purported arbitration award (Dkt. #1). Along with their complaint, Plaintiffs attached
a copy of the alleged arbitration award (Dkt. #1, Exhibit 1), the alleged underlying contract
between the parties (Dkt. #1, Exhibit 2), a Memorandum in Support of Demand to Confirm the
Arbitration Award (Dkt. #1, Exhibit 3), an Affidavit of Demand for Registration of Foreign
Judgment, (Dkt. #1, Exhibit 4), and other documents relating to legal principles (Dkt. #1,
Enclosure 1; Dkt #1, Enclosure 2, Dkt. #1, Enclosure 3). Though the voluminous submissions by

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Plaintiffs are not a model of clarity, the Court attempts to summarize the gravamen of Plaintiffs’
complaint.
According to Plaintiffs, on or about September 6, 2019, the parties entered into an
“agreement” which provided that the parties would settle any dispute arising out of the agreement
by arbitration (Dkt. #1, Exhibit 3 at p. 1). The “agreement” (Dkt. #1, Exhibit 2) is a document
entitled “That Conditional Acceptance for the Value/Agreement/Counter Offer to Acceptance
Offer” and subtitled “Show of Cause Proof of Claim Demand” (Dkt. #1, Exhibit 2 at p. 1). It is
addressed to the Defendants from Plaintiffs, and states in part as follows:
To the Holder in Due Course and/or agent and/or representative,
I, howard james redmond jr., living man, and shashonah deneen redmond, living
woman, have received your offer and accept your offer of your alleged “mortgage”
under the following terms and conditions-That you provide the following proof of
claim. Your failure to provide proof of claim, and to accept payment for credit on
account shall constitute a breach of this binding self-executing irrevocable
contractual agreement coupled with interest and subject the breaching party to
fines, penalties, fees, taxes and other assessments.
(Dkt. #1, Exhibit 2 at p. 2) (emphasis added). Strikingly absent from this “binding self-executing
irrevocable contractual agreement” is any signature from any of the Defendants (See Dkt. #1,
Exhibit 2 at p. 29) (showing only a signature line for Plaintiffs). Rather, it appears that Plaintiffs’
theory is that this “agreement” arose based on Defendants’ failure to respond to it.
Indeed, Plaintiffs explain in the attached memorandum the steps that they unilaterally took,
and to which Defendants did not respond, that resulted in the formation of the agreement and
subsequent purported arbitration award (See Dkt. #1, Exhibit 3). First, on or about September 6,
2019, Plaintiffs mailed to the Defendants the “self-executing irrevocable contractual agreement”
and “received no response” (Dkt. #1, Exhibit 3 at p. 2). Then, on December 4, 2019, Plaintiffs
sent a “Notice of Default” to the Defendants, which also went unresponded to (Dkt. #1, Exhibit 3

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at p. 2). Accordingly, on or about January 5, 2020, pursuant to the alleged agreement, Plaintiffs
filed an arbitration claim with Arbitrator Thomas Bradford Schaults, “claiming $167,000 x 6 =
$1,002,000.00 total damages” (Dkt. #1, Exhibit 3 at p. 3).
The arbitration award (Dkt. #1, Exhibit 1) purports to have been issued by a company called
Private International Arbitration Association, 1 and is signed by an arbitrator named Thomas
Bradford Schaults 2 (Dkt. #1, Exhibit 1 at p. 1, 17). The document states that an arbitration hearing
was conducted electronically on January 21, 2019, which the Defendants did not attend (Dkt. #1,
Exhibit 1). According to the findings of Schaults, “the parties had a pre-established relationship
which placed an obligation on each to communicate with the other” and the Defendants “failure to
respond [] constituted an act of ‘tacit acquiescence’” (Dkt. #1, Exhibit 1 at pp. 11–12). Therefore,
since there was a “binding irrevocable contractual agreement” between the parties, the Defendants
were ordered to pay Plaintiffs $167,000 each (Dkt. #1, Exhibit 1 at pp. 6-7).
On or about February 7, 2020, Plaintiffs allege they attempted to collect on the judgment
“by billing/invoicing the [Defendants],” but the Defendants failed to comply (Dkt. #1, Exhibit 3
at p. 3). Accordingly, on December 21, 2020, Plaintiffs filed suit in this Court, seeking “to confirm
[the] arbitration award” pursuant to 9 U.S.C. § 9 and “demand[ing] that the Judgment be registered
in this Court and that such Judgment be made a Foreign Judgment of this court . . . .” (Dkt. #1,
Exhibit 3 at p. 1; Dkt. #1, Exhibit 4 at p. 2). The Defendants have not appeared in this action.

No arbitration association by the name of “Private International Arbitration Association” appears to exist. As such,
this organization does not appear to be a legitimate arbitration association.
2
The Court notes that Thomas Bradford Schaults also does not appear to hold any authority from any legitimate
arbitration provider to conduct arbitrations.
1

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LEGAL STANDARD
“Subject-matter jurisdiction, because it involves the court’s power to hear a case, can never
be forfeited or waived.” United States v. Cotton, 535 U.S. 625, 630 (2002). Federal jurisdiction
exists only when a “federal question” is presented, 28 USC § 1331, or when there is “diversity of
citizenship” and the amount in controversy exceeds $75,000.00, 28 U.S.C. § 1332. At any stage
in the litigation, “the objection that a federal court lacks subject-matter jurisdiction . . . may be
raised.” Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006). Federal courts “have an independent
obligation to determine whether subject-matter jurisdiction exists, even in the absence of a
challenge from any party.” Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006) (citing Ruhrgas
AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999)). When a federal court concludes that it lacks
subject-matter jurisdiction, the court must dismiss the complaint in its entirety. Id.; see also FED.
R. CIV. P. 12(h)(3).
ANALYSIS
Plaintiffs ask the Court to confirm their alleged arbitration award pursuant to 9 U.S.C. § 9
and register their judgment in this Court pursuant to 28 U.S.C. § 1963 (Dkt. #1, Exhibit 3 at p. 6;
Dkt. #1 at p. 5).
I.

Subject Matter Jurisdiction
This Court must consider the issue of subject matter jurisdiction sua sponte. Howery v.

Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001); see also Arbaugh v. Y & H Corp., 546 U.S. at
514 (“[Federal] courts have an independent obligation to determine whether subject-matter
jurisdiction exists, even in the absence of a challenge from any party”). Federal jurisdiction exists
only when a “federal question” is presented, 28 USC § 1331, or when there is “diversity of
citizenship” and the amount in controversy exceeds $75,000.00. 28 U.S.C. § 1332. The court

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“must presume that a suit lies outside of this limited jurisdiction, and the burden of establishing
federal jurisdiction rests on the party seeking the federal forum.” Howery, 243 F.3d at 916 (5th
Cir. 2001).
A party filing a motion under the FAA to confirm an arbitration award must allege facts
showing an independent jurisdictional basis for the Court to consider that motion because the FAA,
by itself, bestows no federal jurisdiction. See Hall St. Associates, L.L.C. v. Mattel, Inc. 552 U.S.
576, 581–82 (2008); see also Andrew v. Talbot, 833 Fed. App’x. 473, 474 (10th Cir. 2021) (“The
Federal Arbitration Act does not confer subject matter jurisdiction on federal courts absent an
independent jurisdictional basis.”). Stated differently, “[a] district court has no authority to resolve
a motion to confirm an arbitration award under § 9 of the FAA if the arbitration claims would not
otherwise be subject to federal jurisdiction absent the arbitration agreement.” Brett-Andrew: House
of Nelson v. Jackson, 2020 WL 8458834, at *2 (N.D. Tex. Dec. 4, 2020), rec. accepted, 2021 WL
409999, (N.D. Tex. Feb. 5, 2021) (dismissing similar complaint by another Plaintiff seeking to
confirm arbitration award for lack of subject matter jurisdiction). “Such independent bases include
diversity of citizenship under 28 U.S.C. § 1332 or federal question jurisdiction under 28 U.S.C. §
1331.” Quezada v. Bechtel OG & C Constr. Servs., Inc., 946 F.3d 837, 841 (5th Cir. 2020) (citing
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26 n.32 (1983)).
Recently, the Supreme Court of the United States confirmed the aforementioned test to
determine when a federal district court may assert jurisdiction over a request to confirm or vacate
an arbitral award under Sections 9 and 10 of the FAA, 9 U.S.C. § 1 et seq. Badgerow v. Walters,
142 S. Ct. 1310, 1314, 212 L. Ed. 2d 355 (2022). The Supreme Court ultimately concluded that
“Section 9 and 10 applications conform to the normal—and sensible—judicial division of labor:
The applications go to state, rather than federal, courts when they raise claims between non-diverse

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parties involving state law.” Badgerow, 142 S. Ct. at 1321. Although the underlying dispute “may
have originated in the arbitration of a federal-law dispute[,]” “the underlying dispute is not now at
issue.” Id. “Rather, the application concerns the contractual rights provided in the arbitration
agreement, generally governed by state law.” Id. “And adjudication of such state-law contractual
rights [ ] typically belongs in state courts.” Id. at 1321-1322.
Here, Plaintiffs assert that this Court has jurisdiction under 28 U.S.C. § 1331 3 because
“complete diversity exist[s] and the amount is over $75,000.00” and 28 U.S.C. §1963 because
“this is for the registration of judgments for enforcement in other districts” (Dkt. #1, Exhibit 3 at
pp. 1-2). Accordingly, Plaintiffs allege that jurisdiction is proper through diversity jurisdiction
and federal question jurisdiction. The Court disagrees. While the Court must liberally construe
pleadings filed by pro se litigants, see Erickson v. Pardus, 551 U.S. 89, 94 (2007), even under the
most liberal construction, Plaintiffs have failed to allege facts supporting federal question or
diversity jurisdiction.
A. Jurisdiction Under 28 U.S.C. § 1332— Diversity of Citizenship
Subject matter jurisdiction exists under 28 U.S.C. § 1332 only when there is complete
diversity of citizenship between the parties and the matter in controversy exceeds $75,000.
Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537 (5th Cir. 2014). “Complete diversity
requires that all persons on one side of the controversy be citizens of different states than all
persons on the other side.” Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1079 (5th Cir. 2008)
(citing 28 U.S.C. § 1332). For diversity purposes, an individual is a citizen of the state where he is
domiciled. MidCap Media Fin., L.L.C. v. Pathway Data, Inc., 929 F.3d 310, 313–314 (5th Cir.

Section 1331 authorizes federal question jurisdiction, not diversity of citizenship jurisdiction. However, Plaintiffs
allege that the Court has jurisdiction under § 1331 because “complete diversity exist[s] and the amount is over $75,000
. . . ” (Dkt. #1 at p. 5). Thus, the Court will assume that Plaintiffs meant to refer to § 1332.
3

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2019). A corporation is a citizen of the state, or states, of its incorporation and the state where its
principal place of business is located. Id. Importantly, “plaintiff must state all parties' citizenship
such that the existence of complete diversity can be confirmed.” Whitmore v. Victus Ltd., 212 F.3d
885, 888 (5th Cir. 2000); see also Vela v. Manning, 469 Fed. Appx. 319, 320 (5th Cir. 2012) (not
selected for publication). Similarly, the party invoking jurisdiction under § 1332 is responsible for
showing that the parties are completely diverse. See Menchaca v. Chrysler Credit Corp., 613 F.2d
507, 511 (5th Cir. 1980); see also Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1259 (5th
Cir.1988) (“The burden of proving that complete diversity exists rests upon the party who seeks
to invoke the court's diversity jurisdiction.”)
Here, beyond a conclusory allegation that jurisdiction is proper because there is “complete
diversity,” Plaintiffs allege no facts showing that there is complete diversity between the parties.
Indeed, although it is their obligation to “distinctively and affirmatively” allege the citizenship of
the parties, see McGovern v. American Airlines, Inc., 511 F.2d 653, 654 (5th Cir.1975), the
Plaintiffs’ complaint does not provide any facts about the Defendants’ citizenship. While the
alleged contract between the parties provides addresses of the parties, including Texas addresses
for the Plaintiffs and two of the Defendants and non-Texas addresses for the remaining Defendants,
this is insufficient (See Dkt. #1, Exhibit 2). Plaintiffs provide no other detail or allegations
regarding citizenship. See Duru v. Texas State Court, No. 3:15-CV-1855-L, 2016 WL 791449, at
*4 (N.D. Tex. Feb. 11, 2016), report and recommendation adopted, 3:15-CV-1855-L, 2016 WL
775847 (N.D. Tex. Feb. 29, 2016) (finding the mere listing of addresses to be insufficient to
establish the citizenship of the parties). Further, even assuming that the list of addresses was
sufficient to establish the citizenship of the parties, the face of Plaintiffs’ complaint demonstrates
that complete diversity does not exist—since the Plaintiffs and two of the Defendants are citizens

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of Texas. See Whalen v. Carter, 954 F.2d 1087, 1094 (5th Cir.1992) (“[A] district court cannot
exercise diversity jurisdiction if one of the plaintiffs shares the same state citizenship as one of the
defendants.”). For these reasons, Plaintiffs have failed to show complete diversity between the
parties. As such, the Court need not address the amount in controversy component of diversity
jurisdiction.
B. Jurisdiction Under 28 U.S.C. § 1331—Federal Question
Plaintiffs also assert this Court has federal question jurisdiction because their suit is “for
the registration of judgments for enforcement in other districts” under § 1963 (Dkt. #1 at p. 5).
However, this argument is also unavailing.
Federal question jurisdiction exists in all civil actions arising under the Constitution, laws,
or treaties of the United States. Id. § 1331. To determine whether federal question jurisdiction
exists, courts apply the “well-pleaded complaint” rule. The well-pleaded complaint rule “provides
that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's
properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987); Elam v. Kan.
City S. Ry. Co., 635 F.3d 796, 803 (5th Cir. 2011). “Most directly, and most often, federal
jurisdiction attaches when federal law creates the cause of action asserted.” Merrill Lynch, Pierce,
Fenner & Smith Inc. v. Manning, 578 U.S. 374, 383 (2016). Therefore, if the Court finds a
federally created cause of action on the face of the plaintiff's well-pleaded complaint, the Court
may exercise federal question jurisdiction over the claim.
Here, while Plaintiffs’ complaint attempts to invoke the Court’s jurisdiction under 28
U.S.C § 1963, this section does not provide a basis for federal question jurisdiction in this case.
Section 1963 provides, in pertinent part:
A judgment in an action for the recovery of money or property entered in any court
of appeals, district court, bankruptcy court, or in the Court of International Trade
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may be registered by filing a certified copy of the judgment in any other district or,
with respect to the Court of International Trade, in any judicial district, when the
judgment has become final by appeal or expiration of the time for appeal or when
ordered by the court that entered the judgment for good cause shown.... A judgment
so registered shall have the same effect as a judgment of the district court of the
district where registered and may be enforced in like manner.
The “goal of this statute is to aid in the enforceability of federal judgments.” Calderon v.
JPMorgan Chase Bank, N.A., No. 11-1910, 2012 WL 3484683, at *2 (E.D. La. Aug. 12, 2012)
(citing United States v. Kellum, 523 F.2d 1284 (5th Cir.1975)). But, “to be registrable, a judgment
must be valid and subsisting in the jurisdiction of origin.” Id. (citations omitted). Further, “the
plain language of § 1963 applies only to judgments issued by federal courts.” Id. (collecting cases).
Here, the documents included in Plaintiffs’ “Demand for Registration of Foreign
Judgment” do not contain a “certified copy” of a judgment from any federal court as required by
28 U.S.C § 1963. Indeed, there is nothing in the documents that would qualify as a valid judgment
from any recognized court, much less a federal court. That is because the “judgment” they seek
to enforce was entered by an “arbitrator.” Notwithstanding that defect, the documents have been
authored by Plaintiffs, not by a court in connection with legitimate litigation. See id. Accordingly,
because nothing in § 1963 provides the Court with the jurisdiction to enforce an arbitrator’s
judgment—which Plaintiffs purportedly seek to do—there is no federal question jurisdiction under
§ 1963.
II.

Action Dismissed as Frivolous
Even if there were subject matter jurisdiction, the action is wholly frivolous. The Supreme

Court has stated that “a suit may sometimes be dismissed for want of jurisdiction where the alleged
claim under the Constitution or federal statutes . . . is wholly insubstantial and frivolous.” Bell v.
Hood, 327 U.S. 678, 682-83 (1946); see also Neitzke v. Williams, 490 U.S. 319, 327 (1989)
(finding that a district court’s authority to dismiss a claim extends to dismissal of claims that are
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clearly baseless”). The Fifth Circuit has found a claim is “wholly insubstantial and frivolous”
under Bell v. Hood when that “claim has no plausible foundation.” Carmichael v. United Techs.
Corp., 835 F.2d 109, 114 (5th Cir. 1988) (quoting Williamson v. Tucker, 645 F.2d 404, 416 (5th
Cir. 1981)). Moreover, a court may sua sponte dismiss a complaint for lack of subject matter
jurisdiction when the complaint is “‘patently insubstantial,’ presenting no federal question suitable
for decision.” Vasaturo v. Peterka, 203 F. Supp. 3d 42, 44 (D.D.C. 2016) (quoting Best v. Kelly,
39 F.3d 328, 330 (D.C. Cir. 1994)), aff'd, No. 16-5271, 2017 WL 2332615 (D.C. Cir. Feb. 6, 2017).
Stated differently, dismissal for lack of subject matter jurisdiction is appropriate when a complaint
is “‘obviously frivolous’ factually.” Richard-Coulibaly v. Alanis, No. 1:19-MC-11, 2019 WL
3752672, at *2 (E.D. Tex. Aug. 7, 2019) (quoting Maringo v. McGuirk, 268 F. App'x 309, 310
(5th Cir. 2008) (per curiam)). Further, while courts liberally construe pro se complaints, “pro se
status does not provide ‘an impenetrable shield, for one acting pro se has no license to harass
others, clog the judicial machinery with meritless litigation and abuse already overloaded court
dockets.” Burroughs v. Shared Hous. Ctr., No. 3:15-cv-333, 2015 WL 4077216, at *4 (N.D. Tex.
June 17, 2015) (internal quotations omitted). Indeed, a court need not “conjure up unpled
allegations or construe elaborately arcane scripts” to save a pro se complaint. Govea v. ATF, 207
F. App’x 369, 372 (5th Cir. 2006) (per curiam).
Here, it is clear from the face of the complaint that there is no plausible foundation in
Plaintiffs’ complaint. While Plaintiffs ask the Court to confirm their arbitration award under 9
U.S.C. § 9, it is clear that it is based on a legally baseless “contract” to which the Defendants never
assented. Stated differently, the action “is based on the indisputably meritless legal theory that an
individual can fabricate an arbitration award and then enforce it in federal district court.” John v.
Cent. Loan Admin. & Reporting, No. 21-CV-1411, 2021 WL (1845913), at *3 (E.D.N.Y Apr. 13,

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2021) (finding plaintiffs’ purported award to be “bogus” because there was never an agreement to
arbitrate”).
Under the FAA, a court may confirm an arbitration award “[i]f the parties in their
agreement have agreed that a judgment of the court shall be entered upon the award made pursuant
to the arbitration . . . .” 9 U.S.C. § 9. To obtain confirmation of an award, the statute requires the
moving party to file (1) the agreement, (2) the award, and (3) each notice, affidavit, or other paper
used to confirm, modify or correct the award. 9 U.S.C. § 13. This allows the court to determine
whether a valid arbitration agreement and award exist upon which it can base its judgment. As the
Supreme Court has repeatedly emphasized, arbitration is simply a matter of contract and consent.
Granite Rock Co. v. Int'l Bhd. Of Teamsters, 561 U.S. 287, 299 (2010); see also Volt Info. Sciences,
Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989) (“[T]he FAA
does not require parties to arbitrate when they have not agreed to do so.”). Moreover, it is “well
settled that where the dispute at issue concerns contract formation, the dispute is generally for
courts to decide.” Granite Rock, 561 U.S. at 296–97.
Here, Plaintiffs have filed what they claim is the agreement between the parties that
contains an arbitration clause (Dkt. #1, Exhibit 2). However, nothing on the face of this document
indicates that Defendants legally entered into any agreement with Plaintiffs, including any
agreement to arbitrate. The document contains no indication that Defendants agreed to Plaintiffs’
terms. Indeed, the document contains only Plaintiffs’ signatures—not any of the Defendant’s.
While Plaintiffs consider the document to be a “a self-executing” unilateral agreement, that
idea is contrary to the law. It is a fundamental principle of contract law that to create an enforceable
contract, there must be a clear and definite offer followed by a clear and definite acceptance in
accordance with the offer's terms. See United Concrete Pipe Corp. v. Spin–Line Co., 430 S.W.2d

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360, 364 (Tex. 1968). And a purported acceptance that changes or qualifies an offer's material
terms constitutes a rejection and counteroffer rather than an acceptance. See id.
Here, Plaintiffs have failed to present any “agreement” because Defendants never
consented to the terms of the so-called contract. It is a fundamental principle of contract law that
silence does not constitute acceptance of a contract. 4 Restatement (Second) of Contracts § 69 (Am.
Law. Inst. 1981); see also Orman v. Cent. Loan Admin. & Reporting, No. CV-19-04756, 2019 WL
6841741, at *4 (D. Ariz. Dec. 16, 2019) (citing Restatement (Second) of Contracts § 69 and several
states’ case law, and vacating arbitration award that was based on similar unaccepted counteroffer).
Further, Plaintiffs’ own statements make clear that the Defendants did not agree to the
documents—they admit that they received “no response” to the purported agreement (Dkt. #1,
Exhibit 3 at p. 2).
Moreover, Plaintiffs’ own statement that they would interpret a non-response as consent is
legally irrelevant. See Restatement § 69 cmt. c. (“The mere fact that an offeror states that silence
will constitute acceptance does not deprive the offeree of his privilege to remain silent without
accepting.”). Because the Court finds Defendants did not agree to be bound by the contract
Plaintiffs allegedly mailed to them on September 6, 2019, the parties could not have agreed to the
arbitration provision buried in Plaintiffs’ purported contract. Thus, the purported arbitration award
is an “obvious sham and there can be no valid action based thereon.” See In re Matter of:
Arbitration Award of Robert Presley of Hmp Arbitration Servs., No. 4:19-CV-00088-DN-PK,
2019 WL 10817149 (D. Utah Nov. 13, 2019) (denying motion to confirm arbitration against lender

While there are three exceptions to the general rule that silence does not constitute acceptance, none apply here
either. The three circumstances where silence may constitute acceptance are: (1) the offeree takes the offered benefit
with reason to know it was offered with the expectation of compensation; (2) the offeree, in remaining silent, intends
to accept the offer; and (3) previous dealings between the parties give rise to the inference that silence constitutes
acceptance. See Restatement § 69 cmt. a.
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and loan servicer based on tacit approval theory, calling the purported arbitration award an
“obvious sham,” and dismissing the action sua sponte, with prejudice).
The Court’s finding that this action is patently baseless and frivolous is underscored by the
decisions of other district courts around the country that have reached similar conclusions and
refused to enforce similar sham arbitration awards. 5 See, e.g., John v. Cent. Loan Admin. &
Reporting, No. 21-CV-1411, 2021 WL (1845913), at *3 (E.D.N.Y Apr. 13, 2021) (finding
plaintiffs’ purported award to be “bogus” because there was never an agreement to arbitrate”);
Brett-Andrew: House of Nelson v. Jackson, No. 1:20-069, 2021 WL 409999, at *1 (N.D. Tex. Feb.
5, 2021) (dismissing for lack of subject-matter jurisdiction plaintiff’s action seeking to confirm an
alleged $20,000,000 arbitration award against Respondents); Elfar v. Wilmington Tr., N.A., No.
20-MC-0273, 2020 WL 7074609, at *1 (E.D. Cal. Dec. 3, 2020) (dismissing as frivolous an action
to enforce an 8-million-dollar arbitration award); Quamina v. U.S. Bank Nat’l. Ass’n., No. 20-CV61637, 2020 WL 9349559, at * (S.D. Flo. Dec. 24, 2020) (noting plaintiff’s fake arbitration award
scheme is “commonplace” and dismissing action); In Re the Matter of: Arbitration Award of
Robert Presley of HMP Arbitration Servs. v. Bayview Loan Servs., LLC, 2019 WL 10817149 at
*2 (D. Utah Nov. 13, 2019) aff’d sub nom. Wicker v. Bayview Loan Servs., LLC, 19-CV-4169,
2021 WL 270974, at *1 (10th Cir. Jan. 27, 2021) (denying motion to confirm arbitration against
lender and loan servicer based on tacit approval theory, calling the purported arbitration award an
“obvious sham,” and dismissing the action sua sponte, with prejudice); Graves v. Select Portfolio
Servicing, Inc., No. 20-CV-00458, 2020 WL 7365662, at *4 (D. Utah Nov. 9, 2020) (finding
“HMP” is a “sham arbitrator,” citing cases, and recommending dismissal of action to confirm
arbitration award be dismissed with prejudice), report and recommendation adopted, 20-CV-

5

Plaintiffs have also filed similar cases in this Court based on similar allegations.

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00458, 2020 WL 7352736 (D. Utah Dec. 15, 2020); Prince v. TD Bank N.A., 20-CV-0660, 2020
WL 8991788, at *1 (S.D.N.Y. Mar. 23, 2020) (denying plaintiff’s motion to confirm an arbitration
award after opportunity to show cause because the Court lacks subject-matter jurisdiction to
consider it, the defendants did not agree to arbitrate, and because the motion is frivolous).
III.

Futility of Allowing Opportunity to Amend
The Fifth Circuit is inclined to give pro se plaintiffs several opportunities to state a claim

upon which relief can be granted. See Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir.1998);
Scott v. Byrnes, No. 3:07-CV-1975-D, 2008 WL 398314, at *1 (N.D. Tex. Feb. 13, 2008). Indeed,
“[g]enerally, . . . a pro se litigant should be offered an opportunity to amend his [or her] complaint
before it is dismissed.” Brewster v. Dretke, 587 F.3d 764, 768 (5th Cir. 2009) (citing Bazrowx v.
Scott, 136 F.3d 1053, 1054 (5th Cir. 1998) (per curiam)). However, granting leave to amend is
not required if the plaintiff has already pleaded his best case. Id. Indeed, where a court finds that
the plaintiff has alleged his or her best case, dismissal with prejudice without an opportunity to
amend is appropriate. Jones v. Greninger, 188 F.3d 322, 327 (5th Cir. 1999). In this manner, an
opportunity to replead is “unnecessary where the facts alleged are ‘fantastic or delusional
scenarios’ or where the legal theory upon which a complaint relies is ‘indisputably meritless.’”
Gregory v. McKennon, 430 Fed. App’x 306, at *1 (5th Cir. 2011) (quoting Eason v. Thaler, 14
F.3d 8, 9 n.5 (5th Cir. 1994)).
Here, granting leave to amend would be futile because the Court lacks subject matter
jurisdiction and the Court has determined that Plaintiffs’ claims are factually frivolous. See, e.g.,
Deng v. Fed. Bureau of Investigation Agencies, No. 2:20-CV-154, 2021 WL 742297, at *6 (N.D.
Tex. Jan. 26, 2021) (recommending to deny leave to amend because the pro se plaintiff's claims
were “fantastic and delusional and [] thus factually frivolous”), report and recommendation

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adopted, No. 2:20-CV-154-Z, 2021 WL 735207 (N.D. Tex. Feb. 25, 2021); Isom v. U.S. Dep't of
Homeland Sec., No. 4:20-cv-948, 2021 WL 2232052, at *3 (E.D. Tex. Apr. 28, 2021), report and
recommendation adopted, 2021 WL 2224345 (E.D. Tex. June 2, 2021) (recommending that the
Court dismiss pro se plaintiff’s complaint without leave to amend because the court lacked subject
matter jurisdiction and given “the incredible nature of the events alleged in this case”); Flowers v.
Acuity Brands Lighting, No. 3:19-CV-2090-S-BK, 2019 WL 10835996, at *2 (N.D. Tex. Oct. 1,
2019) (recommending the pro se plaintiff be denied leave to amend because it was clear in the
original complaint that the court lacked subject matter jurisdiction), report and recommendation
adopted, No. 3:19-CV-2090, 2020 WL 5983203 (N.D. Tex. Oct. 8, 2020); Narkin v. Reagan, No.
G-06-449, 2006 WL 2591036, at *1 (S.D. Tex. Sept. 7, 2006) (denying the pro se plaintiff leave
to amend because a federal court “is powerless to grant leave to amend when it lacks jurisdiction
over the original complaint”).
CONCLUSION
It is therefore ORDERED that Plaintiffs’ claims against all of the Defendants are
DISMISSED SUA SPONTE WITHOUT PREJUDICE for lack of subject matter jurisdiction. 6
While the Court notes that federal courts across the country have dismissed similar complaints with prejudice as well
as without prejudice, the Court regretfully finds it proper to dismiss this complaint without prejudice. Compare In re
Matter of: Arbitration Award of Robert Presley of HMP Arbitration Servs., No. 19-CV-00088, 2019 WL 10817149,
at *2 (D. Utah Nov. 13, 2019) (dismissing action with prejudice because “the purported award [was] an obvious
sham”), with, John, 2021 WL 1845913, at *3 (dismissing case without prejudice “for lack of subject matter jurisdiction
and because it is frivolous”). The Fifth Circuit has made it clear that courts should consider jurisdictional issues before
addressing any attack on the merits. See Ramming, 281 F.3d at 161; see also Hitt, 561 F.2d at 608 (“Ordinarily, where
both [] grounds for dismissal apply, the court should dismiss only on the jurisdictional ground under FED. R. CIV. P
12(b)(1), without reaching the question of failure to state a claim under FED. R. CIV. P 12(b)(6).”). That is why it
was proper for the Court to dismiss the complaint under FED. R. CIV. P. 12(h)(3)—instead of 12(b)(6). Significantly,
this—the underlying basis for the Court’s dismissal—has important consequences in another context—whether the
action is dismissed with prejudice or without prejudice. See Hitt, 561 F.2d at 608 (“Dismissal with prejudice for failure
to state a claim is a decision on the merits and essentially ends the plaintiff's lawsuit, whereas a dismissal on
jurisdictional grounds alone is not on the merits and permits the plaintiff to pursue his claim in the same or in another
forum.”). Moreover, the Fifth Circuit has recently expressly reiterated “that a jurisdictional dismissal must be without
prejudice” Carver, 18 F.4th at 498; see also Mitchell v. Bailey, 982 F.3d 937, 944 (5th Cir. 2020) (explaining that a
court's dismissal of a case resulting from a lack of subject matter jurisdiction should be made without prejudice).
Thus, as a result of adherence to Fifth Circuit precedent, the Court finds that the action should be dismissed without
prejudice.
6

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.

Although the Court is without jurisdiction to rule on the subject matter of this case, the
Court hereby REFERS this lawsuit to the United States Attorney’s Office for investigation.

SIGNED this 21st day of February, 2023.

___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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