Armando Adames Rivas v. The Bank of New York Mellon ( 2017 )

Case: 15-15324 Date Filed: 01/20/2017 Page: 1 of 12
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-15324
Non-Argument Calendar
________________________
D.C. Docket No. 9:15-cv-81307-KAM
ARMANDO ADAMES RIVAS,
Plaintiff - Appellant,
versus
THE BANK OF NEW YORK MELLON,
a.k.a. BONYM,
BAYVIEW LOAN SERVICING, LLC,
BANK OF AMERICA, N.A.,
LAW OFFICES OF AKERMAN LLP,
ADAM G. SCHWARTZ, et al.,
Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(January 20, 2017)
Case: 15-15324 Date Filed: 01/20/2017 Page: 2 of 12
Before WILSON, ROSENBAUM and JILL PRYOR, Circuit Judges.
PER CURIAM:
Armando Rivas, proceeding pro se, appeals the dismissal of his complaint
alleging that defendants, several entities in the banking and loan industries,
violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.
(“FDCPA”); federal mail and wire fraud statutes, 18 U.S.C. §§ 1341 and 1343; the
Fourteenth Amendment; and a variety of state laws by fraudulently foreclosing on
his home. On appeal, Rivas argues that the district court improperly dismissed his
FDCPA claim as time-barred and should have afforded him an opportunity to file
an amended complaint. We hold that the district court was correct to dismiss
Rivas’s federal claims but abused its discretion by failing to permit Rivas to file an
amended complaint properly alleging diversity jurisdiction over his state law
claims. We therefore affirm in part and vacate in part the district court’s order and
remand for proceedings consistent with this opinion.
I. BACKGROUND
On June 4, 2012, Bank of New York Mellon (“BONYM”) filed a
foreclosure action against Armando Rivas in the Circuit Court of Palm Beach
County (the “Foreclosure Action”). The complaint alleged that Rivas had
defaulted on his mortgage by failing to make required payments, declared the full
amount of the mortgage payable, and requested a court-ordered sale of Rivas’s
2
Case: 15-15324 Date Filed: 01/20/2017 Page: 3 of 12
home. Rivas filed a notice of appearance in the case on June 14, 2012. The
Foreclosure Action was terminated on October 9, 2015 after Rivas filed a
bankruptcy petition in the Southern District of Florida.
Rivas filed a pro se complaint against defendants BONYM, Bayview Loan
Servicing, LLC, Bank of America, N.A., Akerman LLP, several current and former
Akerman attorneys, Morris Schneider Wittstadt LLP, and Silver Jade Deutch.
Rivas’s complaint alleged that the defendants used a fraudulent assignment of
Rivas’s mortgage from American Mortgage Network, Inc. to BONYM to support
the Foreclosure Action. The district court treated the complaint as though it
pursued relief under the FDCPA, the federal mail and wire fraud statutes, the
Fourteenth Amendment, and a variety of state laws. Although the complaint made
no allegations as to when Rivas discovered the alleged fraud, Rivas represented to
the district court that he discovered the defendants’ alleged wrongdoing in May
2014.
The complaint alleged that the district court had both federal question and
diversity jurisdiction over the case. Nonetheless, for all parties except BONYM
and American Mortgage Network, the complaint failed to allege citizenship,
instead pleading only the parties’ residencies. 1 The complaint indicated that a
1
The complaint alleged that BONYM had its principal place of business in New York,
and did not identify any citizenship or residency for American Mortgage Network.
3
Case: 15-15324 Date Filed: 01/20/2017 Page: 4 of 12
number of defendants were “resident[s] of the state of Florida.” The complaint
also alleged that Rivas was “a resident of Palm Beach County, Florida.”
In anticipation of a motion to dismiss, the district court entered a discovery
stay. Thereafter, the defendants moved to dismiss Rivas’ complaint, and the
district court granted the motion. The district court ruled that Rivas’s Fourteenth
Amendment claim failed because the complaint did not allege any state action and
the mail and wire fraud claims failed because those statutes do not create a private
right of action. As to the FDCPA claim, the district court concluded that, because
Rivas failed to file his complaint within one year of discovering the alleged fraud
or the filing of the Foreclosure Action, his claim was barred by the FDCPA’s
statute of limitations. Having disposed of all federal claims with prejudice, the
district court determined that it lacked subject matter jurisdiction over Rivas’s
remaining state law claims because he improperly alleged the parties’ residencies,
as opposed to the parties’ citizenship. 2 The district court dismissed those claims
without prejudice. The court also denied Rivas the opportunity to file an amended
complaint properly alleging diversity jurisdiction, noting that doing so would be
futile because the original complaint alleged that both Rivas and a number of the
defendants were residents of Florida.
2
The district court also declined to assert supplemental jurisdiction over Rivas’s state law
claims. A district court “may decline to exercise supplemental jurisdiction over a claim . . . if . . .
the district court has dismissed all claims over which it has original jurisdiction.” 28 U.S.C. §
1367(c)(3).
4
Case: 15-15324 Date Filed: 01/20/2017 Page: 5 of 12
Rivas appeals the district court’s dismissal of his FDCPA and state law
claims, failure to afford him an opportunity to file an amended complaint, and
entry of a discovery stay pending the outcome of the defendants’ motion to
dismiss.
II. STANDARD OF REVIEW
We review a district court’s decision granting a motion to dismiss de novo.
MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351, 1357 (11th Cir. 2016). In
doing so, we accept the well-pleaded allegations in the complaint as true and view
them in the light most favorable to the plaintiff. See Chaparro v. Carnival Corp.,
693 F.3d 1333, 1335 (11th Cir. 2012). We review the district court’s discovery
rulings for an abuse of discretion. Cliff v. Payco Gen. Am. Credits, Inc., 363 F.3d
1113, 1121 (11th Cir. 2004). “We generally review the district court’s decision to
deny leave to amend for an abuse of discretion, but we will review de novo an
order denying leave to amend on the grounds of futility, because it is a conclusion
of law that an amended complaint would necessarily fail.” City of Miami v. Wells
Fargo & Co., 801 F.3d 1258, 1265 (11th Cir. 2015).
III. DISCUSSION
A. FDCPA Claim
Rivas’s FDCPA claim is subject to a one-year statute of limitations. 15
U.S.C. § 1692k(d) (“An action to enforce any liability created by this subchapter
5
Case: 15-15324 Date Filed: 01/20/2017 Page: 6 of 12
may be brought . . . within one year from the date on which the violation occurs.”).
The district court found that the violation occurred on the date the Foreclosure
Action was filed and concluded that Rivas’s complaint, filed more than a year from
that date, was barred by the statute of limitations. Rivas contends this was error,
arguing that the statute of limitations did not begin to run until he discovered the
defendants’ wrongdoing. We conclude that the district court properly dismissed
Rivas’s FDCPA claim as time-barred.
Rivas’s complaint alleged that the act that violated the FDCPA was the
Foreclosure Action, which allegedly was based on fraudulent documentation. This
Court has not yet determined when the limitations clock begins to run where the
act allegedly violating the FDCPA is a debt collection or foreclosure lawsuit. But
every other court to consider the question has determined that the clock begins to
run on either the date the initial suit was filed or the day the FDCPA plaintiff
became aware of the initial suit—not when the initial suit ultimately was
terminated. See, e.g., Serna v. Law Office of Joseph Onwuteaka, P.C., 732 F.3d
440, 445–46 (5th Cir. 2013); Naas v. Stolman, 130 F.3d 892, 893 (9th Cir. 1997).
We agree. “The alleged violation of the [FDCPA is] not a [judgment terminating
the initial suit], but the bringing of the suit itself.” Naas, 130 F.3d at 893.
Consequently, the statute of limitations in this case began to run on June 4, 2012,
when BONYM filed the Foreclosure Action, or, at the latest, on June 14, 2012
6
Case: 15-15324 Date Filed: 01/20/2017 Page: 7 of 12
when Rivas filed a notice of appearance in the Foreclosure Action. Rivas filed this
action on September 21, 2015, over three years later. His FDCPA claim therefore
is barred.
Rivas argues that under the “delayed discovery” rule, the statute of
limitations did not begin to run until he discovered the defendants’ malfeasance
“sometime in 2015.” But even assuming that a delay in the discovery of the
defendants’ malfeasance can affect when the FDCPA statute of limitations begins
to run, Rivas, in his response to the defendants’ motion to dismiss, represented to
the court that he discovered their fraudulent conduct in May 2014. Based on that
representation, the statute of limitations for Rivas’s FDCPA claim ran at some
point in May 2015. Because Rivas did not file the instant lawsuit until September
21, 2015, the district court properly dismissed his FDCPA claim as time-barred.
B. Subject Matter Jurisdiction over State Law Claims
Rivas next argues that the district court erred in dismissing his state law
claims without affording him an opportunity to properly allege diversity
jurisdiction. We agree.
“Diversity jurisdiction requires complete diversity; every plaintiff must be
diverse from every defendant.” Flintlock Constr. Servs., LLC v. Well-Come
Holdings, LLC, 710 F.3d 1221, 1224 (11th Cir. 2013) (internal quotation marks
omitted). Complete diversity requires diversity of citizenship, rather than diversity
7
Case: 15-15324 Date Filed: 01/20/2017 Page: 8 of 12
of residency. See 28 U.S.C. § 1332(a)(1) (granting federal courts jurisdiction over
certain cases involving “citizens of different States”); Taylor v. Appleton, 30 F.3d
1365, 1367 (11th Cir. 1994) (“Citizenship, not residence, is the key fact that must
be alleged in the complaint to establish diversity for a natural person.”). “For the
purpose of determining diversity jurisdiction, a limited liability company is a
citizen of any state of which a member of the company is a citizen.” Flintlock, 710
F.3d at 1224 (internal quotation marks omitted). “A corporation is considered a
citizen of every state in which it has been incorporated and where it has its
principal place of business.” Id. “[A] limited partnership is a citizen of each state
in which any of its partners, limited or general, are citizens.” Rolling Greens
MHP, L.P. v. Comcast SCH Holdings LLC, 374 F.3d 1020, 1021 (11th Cir. 2004).
The district court properly found that Rivas’s complaint inadequately pled
diversity jurisdiction. Rivas adequately alleged the citizenship of just one party,
BONYM, which the complaint alleged had its “principal place of business” in New
York. For every other party, the complaint alleged only residency, location of a
“corporate office” or “corporate branches,” or, for one party, no such information
whatsoever. Because Rivas failed to plead that his citizenship was diverse from
8
Case: 15-15324 Date Filed: 01/20/2017 Page: 9 of 12
each defendant’s citizenship, the district court properly dismissed Rivas’s state law
claims for a lack of subject matter jurisdiction.3
Nonetheless, the district court erred in declining to permit Rivas to amend
his complaint to properly allege subject matter jurisdiction over his state law
claims. A district court “should freely give leave [to amend a complaint] when
justice so requires.” Fed. R. Civ. P. 15(a)(2). “[U]nless a substantial reason exists
to deny leave to amend, the discretion of the district court is not broad enough to
permit denial.” Shipner v. E. Air Lines, Inc., 868 F.2d 401, 407 (11th Cir. 1989).
The district court may nonetheless deny a motion for leave to amend as futile
“when the complaint as amended would still be properly dismissed or be
immediately subject to summary judgment for the defendant.” Cockrell v. Sparks,
510 F.3d 1307, 1310 (11th Cir. 2007).
The district court found that amendment would be futile, as the complaint
alleged that both Rivas and several defendants were residents of Florida. In doing
3
On appeal, Rivas argues that because two defendants—BONYM and American
Mortgage Network, the originator of the mortgage—are not citizens of Florida, the complaint
established diversity. This argument is meritless. Complete diversity requires that every party
be diverse, not just those parties the plaintiff deems to be particularly important. Moreover, the
complaint did not allege that Rivas himself was a citizen of Florida and provided no
information—not even a residency allegation—concerning American Mortgage Network.
Moreover, on reply, Rivas argues that certain defendants’ actions in the Foreclosure Action
constituted a waiver of their right to challenge the district court’s subject matter jurisdiction. This
argument also fails. Parties cannot confer subject matter jurisdiction on the district court by
waiver or consent. See Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999)
(“The jurisdiction of a court over the subject matter of a claim involves the court’s competency
to consider a given type of case, and cannot be waived or otherwise conferred upon the court by
the parties.”).
9
Case: 15-15324 Date Filed: 01/20/2017 Page: 10 of 12
so, the district court improperly assumed that Rivas’s amended complaint would
look identical to the original complaint, substituting the word “citizen” for
“resident” where appropriate. But, because Rivas did not submit a proposed
amended complaint, the district court’s assumption was baseless. 4 It is distinctly
possible that an amended complaint would allege that the parties are citizens of
states other than the states of residence listed in the original complaint. It is also
possible that an amended complaint would drop certain parties in an effort to
maintain diversity jurisdiction. It is impossible, therefore, to say that Rivas’s
amended complaint “would still be properly dismissed,” id., such that amendment
would be futile. 5 Consequently, the district court erred in denying Rivas the
opportunity to amend his complaint to properly establish diversity jurisdiction over
his state law claims. 6
4
The defendants argue that Rivas’s failure to describe the substance of his proposed
amended complaint required rejection of his request for leave to amend. We disagree. The only
authority defendants cite in support of this proposition holds that it is not an abuse of discretion
for a district court to deny leave to amend where a party filed no proper motion and did not
describe the substance of the proposed amendment. See Rosenberg v. Gould, 554 F.3d 962, 967
(11th Cir. 2009). Notably, in Rosenberg, the plaintiff was represented by counsel. A district
court is not required to reject a pro se request for leave to amend simply because the request fails
to set forth the substance of the proposed amendment.
5
By contrast, the district court properly determined that amendment in an effort to
salvage Rivas’s federal claims would be futile. Of his federal claims, Rivas appeals only the
district court’s ruling on his FDCPA claim and, as noted above, that claim is time-barred.
Consequently, on remand, the district court need not permit Rivas to replead his FDCPA, federal
mail and wire fraud, and Fourteenth Amendment claims.
6
The defendants also argue that Rivas has not properly preserved this issue for appeal
because he did not file a motion for leave to amend his complaint in the district court; instead,
Rivas only asserted that he had a right to amend his complaint in his response to the defendants’
motion to dismiss, which the district court construed as a request for leave to file an amended
10
Case: 15-15324 Date Filed: 01/20/2017 Page: 11 of 12
C. Discovery Stay
Finally, Rivas argues that the district court abused its discretion in imposing
a discovery stay pending the filing and dispensation of the defendants’ motion to
dismiss. We disagree. “[D]istrict courts are entitled to broad discretion in
managing pretrial discovery matters.” Perez v. Miami-Dade Cty., 297 F.3d 1255,
1263 (11th Cir. 2002). We “emphasize[] the responsibility of trial courts to
manage pretrial discovery properly in order to avoid a massive waste of judicial
and private resources and a loss of society’s confidence in the courts’ ability to
administer justice.” Id. (internal quotation marks omitted). Granting a discovery
stay until an impending motion to dismiss is resolved is a proper exercise of that
responsibility. Motions to dismiss for failure to state a claim “always present[] a
purely legal question; there are no issues of fact because the allegations contained
in the pleading are presumed to be true. Therefore, neither the parties nor the court
ha[s] any need for discovery before the court rules on the motion.” Chudasama v.
Mazda Motor Corp., 123 F.3d 1353, 1367 (11th Cir. 1997) (citation omitted).
Indeed, motions to dismiss should, ideally, “be resolved before discovery begins.”
complaint. “A document filed pro se is to be liberally construed.” Erickson v. Pardus, 551 U.S.
89, 94 (2007) (internal quotation marks omitted). Because Rivas’s opposition to the defendants’
motion to dismiss was pro se, the district court was well within its discretion to treat his assertion
as a motion for leave to file an amended complaint.
11
Case: 15-15324 Date Filed: 01/20/2017 Page: 12 of 12
Id. The district court therefore did not abuse its discretion in imposing a discovery
stay.
IV. CONCLUSION
For the foregoing reasons, the judgment of the district court is affirmed in
part, vacated in part, and remanded for further proceedings consistent with this
opinion.7
AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
7
We reject Rivas’s argument that the district court violated his due process rights by
granting the defendants’ motion to dismiss and that the district court was biased against him.
Moreover, we decline to consider the defendants’ arguments that Rivas’s claims are barred by
Florida’s litigation privilege and res judicata, and that such claims should be dismissed because
they were compulsory to the Foreclosure Action. The district court did not reach these issues,
and we will not evaluate them in the first instance. See Wilkerson v. Grinnell Corp., 270 F.3d
1314, 1322 n.4 (11th Cir. 2001).
12