Yellen v. U.S. Bank National Association ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
MIKE YELLEN et al.,
Plaintiffs,
v. Case No. 1:16-cv-02467 (TNM)
U.S. BANK, NATIONAL ASSOCIATION
et al.,
Defendants.
MEMORANDUM OPINION
Plaintiffs, six individuals proceeding pro se, have filed an Amended Complaint against
13 defendants, which include seven corporate entities, primarily banks; “Steve Munchi, Principal
Owner of Onewest Bank;” “John/Jane Does 1-100 Corporation;” “John/Jane Does 1-100
Partnerships;” “John/Jane Does 1-100 Non-Profit Entities;” and “John/Jane Does 1-100
Government Entities.” Am. Compl. 1-2, ECF No. 33. The Plaintiffs allege misconduct related
to mortgage loan servicing, mortgage loan origination, and bankruptcy proceedings. Id. 8-18.
All of the bank defendants have filed motions to dismiss. Upon consideration of the
pleadings, relevant law, and related legal memoranda in opposition and in support, I find that the
Plaintiffs have failed to adequately plead sufficient facts to establish that this Court has personal
jurisdiction over defendants Bank of America, N.A. and Countrywide Home Loans, Inc.; and
have failed to state a claim upon which relief can be granted with respect to defendants Deutsche
Bank National Trust Company, U.S. Bank, National Association, One West Bank F.S.B., and
SecurityNational Mortgage Company. Furthermore, I find that the Plaintiffs have failed to state
a claim against the remaining defendants—“RCO Hawaii, L.L.L.C. and its agent[s] Glenn
Fukuhara and Brett Ryan;” “Steve Munchi, Principal Owner of Onewest Bank;” and the
John/Jane Doe entities. Accordingly, the Defendants’ motions will be granted, and the Amended
Complaint will be dismissed without prejudice.
I. Background
The Plaintiffs are six individuals who appear to have residential mortgages serviced by
certain of the defendants, some of which may be in foreclosure. See Pls. Opp. to Defs.’ Mot. to
Dismiss (“Pls. Opp.”) 5-6, ECF No. 55. The Plaintiffs’ original complaint brought claims
against numerous financial institutions and 100 John and Jane Doe entities. Compl. 1-3, ECF
No. 1. After a half dozen defendants filed motions to dismiss, the Court granted the Plaintiffs’
motion to amend the complaint. Order, ECF No. 29.
The Plaintiffs’ renewed complaint dropped nearly two dozen individuals as plaintiffs and
amended the named defendants in the suit.1 The Amended Complaint alleges eight counts of
action, which are described as: “unfair and deceptive consumer practices with respect to loan
servicing” (Count 1), “unfair and deceptive consumer practices with respect to foreclosure
processing” (Count 2), “unfair and deceptive consumer practices with respect to loan
origination” (Count 3), “violations of the False Claims Act” (Count 4), “declaratory judgment
under 28 U.S.C. §§ 2201 and 2202” (Count 5), “damages under common law” (Count 6), failure
to follow “procedures under [the] Fair Debt Collection Practices Act” (Count 7), and “unfair and
deceptive business act practices” (Count 8). Each bank defendant has filed a motion to dismiss.
Defendants Bank of America, N.A. and Countrywide Home Loans, Inc. have moved to
dismiss the complaint due to lack of personal jurisdiction and failure to state a claim upon which
1
For any defendants named in the original but not in the Amended Complaint, the Court
considers those defendants dismissed from the action. See Adams v. Quattlebaum, 219 F.R.D.
195, 198 (D.D.C. 2004) (“The amended complaint is now the operative complaint due to its
superseding nature.”).
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relief can be granted. Mem. of P. & A. in Supp. of Bank of America, N.A. and Countrywide
Home Loans, Inc.’s Mot. to Dismiss Pls.’ Am. Compl. (“BoA and Countrywide Mot. to
Dismiss”), ECF No. 44.
Defendant Deutsche Bank National Trust Company has moved to dismiss for failure to
state a claim upon which relief can be granted. Mem. of P. & A. in Supp. of Deutsche Bank
National Trust Company’s Mot. to Dismiss, ECF No. 45-1.
Ocwen Loan Servicing, LLC, as attorney in fact for U.S. Bank National Association and
One West Bank F.S.B., has moved to dismiss for failure to state a claim upon which relief can be
granted. Mem. of P. & A. in Supp. of Ocwen Loan Servicing, LLC as Attorney in Fact for U.S.
Bank, N.A. and One West Bank F.S.B. (“Ocwen Mot. to Dismiss”), ECF No. 46-1.
Defendant SecurityNational Mortgage Company has moved to dismiss for failure to state
a claim upon which relief can be granted. Mem. of P. & A. in Supp. of SecurityNational
Mortgage Company’s Mot. to Dismiss, ECF No. 52-1.
II. Legal Standard
A. Failure to Establish Personal Jurisdiction
For a defendant to be subject to suit in a particular forum, the defendant must “have
sufficient minimum contacts with [the forum] such that the maintenance of the suit does not
offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v. Washington,
326 U.S. 310, 316 (1945). A defendant who lacks the sufficient contacts with the forum may
move to dismiss for lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). The plaintiff bears
the burden of making a prima facie showing of specific facts sufficient to establish personal
jurisdiction. Reuber v. United States, 750 F.2d 1039, 1052 (D.C. Cir. 1984). In considering a
motion brought under Federal Rule of Civil Procedure 12(b)(2), the court is not required to treat
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as true all of the plaintiff’s allegations; however, the court must resolve any factual discrepancies
in establishing personal jurisdiction in favor of the plaintiff. See Crane v. New York Zoological
Soc’y, 894 F.2d 454, 456 (D.C. Cir. 1990).
B. Failure to State a Claim Upon Which Relief Can Be Granted
A party may move to dismiss a complaint on the ground that it “fail[s] to state a claim
upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure
8(a)(2) requires that a complaint contain “a short and plain statement of the claim showing that
the pleader is entitled to relief.” This requires the complaint to contain sufficient factual
allegations that, if true, “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). A complaint is insufficient if it merely offers “‘labels and
conclusions’” or “‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555, 546). Rather, “[a] claim has
facial plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at
678. Plausibility “asks for more than a sheer possibility that a defendant has acted unlawfully,”
id., and pleading facts that are “merely consistent with” a defendant’s liability “stops short of the
line between possibility and plausibility.” Twombly, 550 U.S. at 545-46.
In evaluating a motion to dismiss pursuant to Rule 12(b)(6), the Court must construe the
complaint in the light most favorable to the Plaintiffs and accept as true all reasonable factual
inferences drawn from well-pled factual allegations. See In re United Mine Workers of Am.
Emp. Benefit Plans Litig., 854 F. Supp. 914, 915 (D.D.C. 1994). Further, complaints filed by
pro se plaintiffs “must be held to less stringent standards than formal pleadings drafted by
lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007). However, pro se plaintiffs must still
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adequately plead their complaint consistent with the edicts of Iqbal and Twombly. See Atherton
v. D.C. Office of Mayor, 567 F.3d 672, 682 (D.C. Cir. 2009). This means that the Court does not
accept as true legal conclusions or “[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements.” Iqbal, 556 U.S. at 678. Last, “[i]n determining
whether a complaint fails to state a claim, [the court] may consider only the facts alleged in the
complaint, any documents either attached to or incorporated in the complaint and matters of
which [the court] may take judicial notice.” Hurd v. District of Columbia Gov’t, 864 F.3d 671,
678 (D.C. Cir. 2017) (quoting EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624
(D.C. Cir. 1997)).
III. Analysis
A. Bank of America, N.A. and Countrywide Home Loans, Inc.
Bank of America, N.A. (“Bank of America”) and Countrywide Home Loans, Inc.
(“Countrywide”) challenges the Amended Complaint for failing to plead facts to establish that
they are properly subject to personal jurisdiction in this District. BoA and Countrywide Mot. to
Dismiss 4-7. I agree that the Plaintiffs have not made a prima facie showing of specific facts
sufficient to establish personal jurisdiction. See Reuber, 750 F.2d at 1052.
To support a showing of personal jurisdiction, the Plaintiffs simply state in their
Amended Complaint that suit is proper because “the Banks have transacted business in this
District, and because the Banks have committed acts proscribed by the False Claims Act in this
District.” Am. Compl. ¶ 5. This single sentence is insufficient to establish that Bank of America
and Countrywide should be haled into court—either under specific or general personal
jurisdiction—in this District for the grievances alleged.
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Other than the general allegation that Bank of America and Countywide have transacted
business in this District, the 26-page complaint fails to allege that Bank of America and
Countrywide have taken any actions in this District with respect to the Plaintiffs’ complaints.
Indeed, other than listing Bank of America and Countrywide in two instances in the introduction,
the Amended Complaint fails to mention Bank of America or Countrywide entirely. See Am.
Compl. ¶¶ 1, 4. Though the Amended Complaint generally alleges that “the Banks service[]
home mortgage loans secured by residential properties owned by individual citizens of the
Plaintiffs,” the complaint fails to identify whether the residential properties are within this
District; and in fact, the complaint pleads facts to the contrary: the Plaintiffs’ property addresses
are all in Hawaii. See id. ¶ 1, 22. This lack of any showing that Bank of America and
Countrywide have committed conduct in this District that “create[s] a substantial connection
with [this] forum” fails to establish specific personal jurisdiction in this District. See Walden v.
Fiore, 134 S. Ct. 1115, 1121 (2014); see also Goodyear Dunlop Tires Ops., S.A. v. Brown, 564
U.S. 915, 919 (2011) (“[S]pecific jurisdiction is confined to adjudication of ‘issues deriving
from, or connected with, the very controversy that establishes jurisdiction.’”).
Furthermore, the complaint fails to make any allegations to establish that Bank of
America and Countrywide have “continuous and systematic” ties to this District such that they
are “essentially at home” here. Id. Other than the two cursory references to Bank of America
and Countrywide in the introduction, and the broad assertion that “the Banks have transacted
business in this District,” the Amended Complaint does not plead any specific facts to make a
showing that this District should be considered Bank of America’s and Countrywide’s home
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forum. See Am. Compl. ¶ 5.2 The Amended Complaint provides no basis for establishing
general personal jurisdiction over Bank of America and Countrywide. Accordingly, the
Amended Complaint as against Bank of America and Countrywide must be dismissed.
B. Deutsche Bank National Trust Company, U.S. Bank National Association, One
West Bank F.S.B., SecurityNational Mortgage Company
Although it is not clear that the Amended Complaint alleges sufficient facts to establish
personal jurisdiction over Deutsche Bank National Trust Company, U.S. Bank National
Association, One West Bank F.S.B., or SecurityNational Mortgage Company (collectively, the
“Bank Defendants”), as these defendants have not raised personal jurisdiction as a defense, I
proceed to assess their motions to dismiss for failure to state a claim. See Gilmore v. Palestinian
Interim Self-Gov’t Auth., 843 F.3d 958, 964-65 (D.C. Cir. 2016) (failure to assert a personal
jurisdiction defense waives the objection).
The Amended Complaint fails to state a claim against any of the Bank Defendants for
any of the eight counts alleged. None of the allegations in the Amended Complaint are
particularized to any of the Bank Defendants; instead, the Plaintiffs group all of the Bank
Defendants together and collectively allege that “the Banks[’ conduct] constitutes unfair and
deceptive practices;” Am. Compl. ¶¶ 55, 58, 61; that “the Banks knowingly presented or caused
to be presented false or fraudulent claims for payment or approval;” Am. Compl. ¶ 64; “the
Banks implemented and relied on inadequate bankruptcy procedures;” Am. Compl. ¶¶ 72, 77;
that “the Defendants did not have the right to foreclose on the Subject Property;” Am. Compl.
2
Bank of America proffers that it is headquartered in Charlotte, North Carolina; and
Countrywide proffers that it is headquartered in California and organized under the laws of New
York. BoA and Countrywide Mot. to Dismiss 5 n.1.
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¶ 82; and that the “Defendants [have] violated the Unfair and Deceptive Acts and Practices.”
Am. Compl. ¶ 86. These legal conclusions, which I do not have to accept as true, are supported
by non-particularized general assertions merely offering “labels and conclusions.” See Am.
Compl. 8-18; Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555. For example, the Amended
Complaint generally alleges that the Bank Defendants “fail[ed] to timely and accurately apply
payments made by borrowers and failing to maintain accurate account statements” and “fail[ed]
to perform proper loan modification underwriting,” but does not provide any specific instances
where the Bank Defendants allegedly failed to do so. See Am. Compl. ¶¶ 26(a), 33(a). This
does not show that the Plaintiffs are entitled to relief, and furthermore fails to “state with
particularity the circumstances constituting fraud” that is required for all claims alleging fraud as
the Plaintiffs do so here. See Fed. R. Civ. P. 8(a)(2), 9(b); see also, e.g., Am. Compl. ¶¶ 24, 34
(alleging unfair or deceptive practices).
Not only do these broad assertions fail to state a claim against the Bank Defendants as a
general matter, the Amended Complaint also fails to allege any nexus between each Bank
Defendant and each Plaintiff. This may be due to the fact that much of the Amended Complaint
appears to be copied-and-pasted from a complaint filed by the United States, the Consumer
Financial Protection Bureau, and a number of state Attorney Generals against Suntrust Mortgage,
Inc. See Compl., United States et al. v. Suntrust Mortgage Inc., No. 14-cv-01028 (D.D.C. June
17, 2014), ECF No. 1 (“Suntrust Complaint”).3 The Plaintiffs attempt to recycle and reuse the
allegations in that wholly unrelated case, involving government plaintiffs against a single
defendant, to bring an action against the dozen plus defendants named in this case. The end
3
A Consent Judgment resolving the action was simultaneously filed with the Suntrust
Complaint. See Consent J., United States et al. v. Suntrust Mortgage Inc., No. 14-cv-01028
(D.D.C. June 17, 2014), ECF No. 1-1.
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result is that the Amended Complaint fails to sufficiently plead facts to plausibly allege any of
the Bank Defendants has acted unlawfully with respect to each of the Plaintiffs and with respect
to each of the causes of action alleged.
In light of the absence of sufficiently particularized and well-pleaded facts to support any
of the claims in the Amended Complaint, it is repetitive and unnecessary to review each claim
individually. However, Count Four is an especially poignant example of how the Amended
Complaint fails to make sufficient allegations pertaining to these defendants. Count Four of the
Amended Complaint alleges violations of the False Claims Act. Am. Compl. ¶ 64 (“[T]he Banks
knowingly presented or caused to be presented false or fraudulent claims for payment or
approval”). But the False Claims Act requires actions to “be brought in the name of the
Government,” and to be filed under seal. 31 U.S.C. §§ 3730(b)(1)-(b)(2). While this claim may
have been properly brought in the Suntrust Complaint, where the plaintiffs were the federal and
state governments, the Plaintiffs in this matter have utterly failed to comply with the procedural
requirements of the False Claims Act. See id.; Am. Compl. ¶ 1 (stating that the Plaintiffs bring
this action as individuals). Furthermore, courts in this District have found that pro se plaintiffs
cannot represent the interests of the United States. United States ex rel. Rockefeller v.
Westinghouse Elec. Co., 274 F. Supp. 2d 10, 16-17 (D.D.C. 2003). The Plaintiffs’ adoption of a
complaint in a separate matter involving wholly different parties fails to adequately state a claim
with respect to their own claims and the Bank Defendants.
The Plaintiffs’ Opposition to each of the Bank Defendants’ motions to dismiss does not
cure the failure to adequately plead their claims. The Plaintiffs attach a number of exhibits to
their Opposition and ask that the Court take judicial notice of these exhibits. Pls. Opp. 5-6.
Assuming without deciding that facts in an opposition brief may be considered when ruling on a
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