Anthony L. Thomas v. Pentagon Federal Credit Union ( 2010 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 10-10203 ELEVENTH CIRCUIT
Non-Argument Calendar AUGUST 19, 2010
________________________ JOHN LEY
CLERK
D.C. Docket No. 1:09-cv-03236-TWT
ANTHONY L. THOMAS,
llllllllllllllllllll lPlaintiff - Appellant,
versus
PENTAGON FEDERAL CREDIT UNION,
HOWICK, WESTFALL, MCBRYAN & KAPLAN,
lllllllllllllllllllll Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(August 19, 2010)
Before EDMONDSON, MARTIN and FAY, Circuit Judges.
PER CURIAM:
Anthony L. Thomas appeals the district court’s order dismissing as
frivolous his pro se suit alleging fraud and violations of the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. §§ 2601-2617; the Truth in Lending Act
(“TILA”), 15 U.S.C. §§ 1601-1667f; and the Troubled Asset Relief Program
(“TARP”), 12 U.S.C. § 5211(a)(1). Thomas argues that the district court abused
its discretion by (1) finding that he failed to plead a claim of fraud, (2) failing to
address his TARP claim, (3) allowing a magistrate judge to enter a final judgment
without his consent, (4) dismissing the case prior to the defendants’ filing of a
responsive pleading, and (5) violating his due process rights. For the reasons set
forth below, we affirm.
I.
Thomas filed a complaint against Pentagon Federal Credit Union and
Howick, Westfall, McBryan & Kaplan, (collectively, “the defendants”), alleging
that he executed a promissory note, which Pentagon fraudulently sold without his
knowledge or consent. Thomas asked the court to allow him to proceed in forma
pauperis.
A magistrate judge ordered Thomas to amend his complaint within 30 days
to comply with Federal Rule of Civil Procedure 8's requirement that a complaint
clearly state a cause of action. The magistrate noted that Thomas’s amended
complaint should explain how the named defendants were involved in the claim
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and specify what rights were violated and how the laws support his allegations.
The magistrate warned Thomas that he was required to comply with the Federal
Rules of Civil Procedure and the Local Rules for the Northern District of Georgia,
even though he was proceeding pro se. He noted that “failure to comply with this
. . . Order may result in dismissal of this action.”
Thomas filed an amended complaint, which stated that “[t]his case arises out
of Defendants’ egregious and ongoing far reaching fraudulent schemes for
improper use of Plaintiff’s identity, [and] negligent and/or intentional
misrepresentation of the executed Promissory Note and [Pentagon’s] alleged
advance[ment] of $145,300.00.” Thomas also alleged that he had submitted to
Pentagon a qualified written request, which the defendants “either ignored or
refused to acknowledge or refused to resolve,” in violation of the RESPA, the
TILA, and other applicable federal statutes. Thomas also contended that Pentagon
fraudulently changed the terms of his promissory note and committed identity theft
by negotiating the promissory note.
Thomas asserted that the defendants never informed him that the promissory
note could be sold, transferred, or assigned to third parties. He alleged that, on
June 24, 2009, TPE Company, Inc. offered to purchase his promissory note from
Pentagon, but Pentagon failed to respond to TPE. Thomas also alleged that
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Pentagon violated the TARP by failing to offer him a loan modification as he
requested.
The magistrate judge granted Thomas’s motion to proceed in forma
pauperis pursuant to 28 U.S.C. § 1915(a), and ordered the clerk of the court to
submit the case to a district judge for a frivolity determination under 28 U.S.C.
§ 1915(e)(2).
The district court dismissed Thomas’s complaint as frivolous under 28
U.S.C. § 1915. It stated that Thomas’s “vague and conclusory allegations of fraud
do not state a plausible claim for relief.” It denied Thomas’s motion for a stay,
injunction, and restraining order.
II.
We review for abuse of discretion a district court’s sua sponte dismissal for
frivolity. Bilal v. Driver, 251 F.3d 1346, 1349 (11th Cir. 2001). “Pro se pleadings
are held to a less stringent standard than pleadings drafted by attorneys and will,
therefore, be liberally construed.” Tannenbaum v. United States, 148 F.3d 1262,
1263 (11th Cir. 1998). This leniency, however, does not require or allow courts to
rewrite an otherwise deficient pleading in order to sustain an action. GJR Invs.,
Inc. v. County of Escambia, Fla., 132 F.3d 1359, 1369 (11th Cir. 1998).
In forma pauperis proceedings are governed by Section 1915 of Title 28.
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See 28 U.S.C. § 1915. Subsection (e)(2) of that statute provides that “the court
shall dismiss the case at any time if the court determines that . . . the action or
appeal . . . is frivolous or malicious.” 28 U.S.C. § 1915(e)(2)(B)(i). A claim is
frivolous if it is without arguable merit either in law or fact. Bilal, 251 F.3d at
1349; Caroll v. Gross, 984 F.2d 392, 393 (11th Cir. 1993) (holding that a case is
frivolous for purposes of § 1915(d), (now § 1915(e)(2)(B)(i)), when it appears that
a plaintiff has “little or no chance of success”).
III.
As an initial matter, in his initial appellate brief, Thomas fails to present any
argument regarding his RESPA and TILA claims. Therefore, he has abandoned
any argument that the district court abused its discretion by dismissing these
claims. See Timson v. Sampson, 518 F.3d 870, 874 (11th Cir. 2008) (providing
that a pro se appellant abandons an issue if he fails to offer argument on it in his
initial brief, and that we will not address issues raised for the first time in an
appellant’s reply brief).
Thomas argues that the district court erred by ignoring that he pleaded
fraud. “To state a claim premised on fraud, [a defendant must] ‘state with
particularity the circumstances constituting [the] fraud.’” United States ex rel.
Sanchez v. Lymphatx, Inc., 596 F.3d 1300, 1302 (11th Cir. 2010) (quoting
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Fed.R.Civ.P. 9(b)). To comply with Rule 9(b), a complaint must set forth:
(1) precisely what statements were made in what documents or
oral representations or what omissions were made, and (2) the
time and place of each such statement and the person responsible
for making (or, in the case of omissions, not making) same, and
(3) the content of such statements and the manner in which they
misled the plaintiff, and (4) what the defendants obtained as a
consequence of the fraud.
Ziemba v. Cascade Intern., Inc., 256 F.3d 1194, 1202 (11th Cir. 2001). Here,
Thomas failed to adequately plead fraud, because he did not identify any specific
statements made by the defendants. See id. Instead, he simply alleged that the
defendants fraudulently changed the terms of his promissory note, without
explaining what terms were changed. To the extent that Thomas’s amended
complaint could be construed to allege that the defendants committed fraud by
failing to inform him that the promissory note could be sold, transferred, or
assigned, Thomas failed to identify the time and place of this omission, the person
responsible for making the omission, and what the defendants obtained as a
consequence of the fraud. See id. Accordingly, the district court did not err in
dismissing Thomas’s fraud claim as frivolous, because it lacked legal merit. See
Bilal, 251 F.3d at 1349.
Thomas also argues that the district court abused its discretion by failing to
address his claim that he was denied benefits under the TARP. The TARP,
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enacted as part of the Emergency Economic Recovery Act, authorizes the
Secretary of the Treasury “to purchase, and to make and fund commitments to
purchase, troubled assets from any financial institution, on such terms and
conditions as are determined by the Secretary.” 12 U.S.C. § 5211(a)(1). The
statute provides for judicial review of the Secretary’s decision, but does not
mention a private right of action against private entities. Thus, it appears that
Congress did not intend to allow such actions under § 5211. See Alexander v.
Sandoval, 532 U.S. 275, 290, 121 S. Ct. 1511, 1521-22, 149 L. Ed. 2d 517 (2001)
(providing that “[t]he express provision of one method of enforcing a substantive
rule suggests that Congress intended to preclude others”). However, even if the
TARP authorized a plaintiff to bring a private action against TARP fund
recipients, Thomas failed to allege that the defendants received TARP funds.
Furthermore, Thomas alleged in his amended complaint that the defendants
violated the TARP by failing to modify his loan. He does not explain how the
failure to modify a loan violates the TARP. Accordingly, because Thomas’s
TARP claim has “little or no chance of success,” the district court did not abuse its
discretion in dismissing the claim as frivolous. See Caroll, 984 F.2d at 393.
Next, Thomas argues that the magistrate lacked authority to enter the final
judgment in his case. Although a magistrate’s entry of a final order of judgment is
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not permitted unless the parties consent, a magistrate judge may determine pretrial
matters without the parties’ consent. See 28 U.S.C. § 636(b)(1)(A), (c)(1). A
review of the record shows that, although the magistrate judge ordered Thomas to
file an amended complaint and ordered the clerk to submit the case to a district
court judge for a frivolity determination, the final order dismissing the case for
frivolity was, in fact, entered by the district court judge, rather than the magistrate.
Accordingly, Thomas’s argument that the magistrate entered the final order of
judgment is meritless.
Thomas argues that the district court erred by dismissing his case before the
defendants filed responsive pleadings. This claim is also meritless, because 28
U.S.C. § 1915 allows the district court to dismiss a case “at any time” if it
determines that the action is frivolous. 28 U.S.C. § 1915(e)(2)(B)(i).
Finally, Thomas contends that the district court violated his due process
rights by dismissing his complaint for frivolity. Principles of due process require
that a party have adequate notice of the consequences of his conduct. See Link v.
Wabash Railroad Co., 370 U.S. 626, 632, 82 S. Ct. 1386, 1389, 8 L. Ed. 2d 734
(1962). However, “[e]very order entered without notice and a preliminary
adversary hearing [does not] offend due process. The adequacy of notice and
hearing respecting proceedings that may affect a party’s rights turns, to a
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considerable extent, on the knowledge which the circumstances show such party
may be taken to have of the consequences of his own conduct.” Carlucci v. Piper
Aircraft Corp., Inc., 775 F.2d 1440, 1452 (11th Cir. 1985).
Here, Thomas was afforded adequate notice of the consequences of his
failure to comply with the Rules of Civil Procedure. The magistrate instructed
Thomas that his complaint had to comply with Fed.R.Civ.P. 8, which requires a
complaint to clearly state a cause of action. The magistrate specifically explained
to Thomas that his complaint should state how the defendants were involved in the
alleged conduct, what rights the defendants violated, and what laws supported his
allegations. The magistrate gave Thomas 30 days in which to correct his
complaint and warned him that, if the complaint failed to comply with the Federal
Rules of Civil Procedure and the local rules, his complaint could be dismissed.
Because Thomas was aware of the rules with which he had to comply and the
consequences of his failure to comply, and because he was given 30 days in which
to correct his complaint, the district court did not violate his due process rights
when it dismissed his complaint as frivolous. See Carlucci, 775 F.2d at 1452.
Accordingly, we affirm the district court’s dismissal of Thomas’s complaint
pursuant to 28 U.S.C. § 1915(e)(2)(B)(i).
AFFIRMED.
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