Segelstrom v. Citibank, N.A. , 76 F. Supp. 3d 1 ( 2014 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ERIK SEGELSTROM, et al.,
Plaintiffs,
v. Civil Action No. 14-1071 (CKK)
CITIBANK, N.A., et al,
Defendants.
MEMORANDUM OPINION
(November 21, 2014)
Plaintiffs Erik Segelstrom and Cathie Hamer, who are proceeding pro se, filed this
lawsuit against five “Doe” defendants and seven named defendants—Citibank N.A.
(“Citibank”), Nationstar Mortgage LLC (“Nationstar”), Sheriff Thomas Allman, in his personal
and private capacity, and the Mendicino County Sheriff’s Department (collectively the “Law
Enforcement Defendants”), and TFLG A Law Corporation, Eric G. Fernandez, and Viana G.
Barbu1 (collectively the “Law Firm Defendants”). Plaintiffs challenge the foreclosure of
1
Plaintiffs have not filed any proof of service on Defendant Viana G. Barbu, who was an
attorney at TFLG A Law Corporation (“TFLG”). See Law Firm Defendants’ Notice, ECF No.
[24], at 1. Ms. Barbu has never entered an appearance in this case. It was initially not clear from
the Motion to Dismiss submitted by counsel for TFLG and Eric G. Fernandez whether their
counsel also represented Ms. Barbu. Accordingly, the Court ordered counsel for TFLG and Mr.
Fernandez to clarify whether she was representing Ms. Barbu. See Minute Order (Sept. 2, 2014).
On September 3, 2014, counsel for TFLG and Mr. Fernandez entered a Notice on the public
docket indicating that she did not represent Ms. Barbu, that Ms. Barbu is no longer employed
with TFLG, and that “[u]pon information and belief, . . . Defendant Barbu has not been served in
this cause.” Law Firm Defendants Notice at 1. Counsel further indicated that a process server
had attempted to serve Mr. Fernandez with a summons and complaint for Ms. Barbu, but Mr.
Fernandez informed the process server that Ms. Barbu no longer worked at the firm and that he
was not authorized to accept service on her behalf. Id. The deadline for serving Defendants in
this case was October 23, 2014. When Plaintiffs properly filed their Amended Complaint on
October 14, 2014, Plaintiffs did not include Ms. Barbu in the case caption and the Complaint no
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Plaintiffs’ California property and the related unlawful detainer proceeding. Plaintiffs also allege
intentional infliction of emotion distress and numerous claims under the False Claims Act, 31
U.S.C. § 3729 et seq. Presently before the Court are motions by several Defendants for dismissal
of this lawsuit as well as Plaintiffs’ Motion for Preliminary Injunction and Temporary
Restraining Order and Motion to Amend the Complaint. Upon consideration of the pleadings,2
the relevant legal authorities, and the record as a whole, the Court issues the following rulings.
The Court GRANTS Plaintiffs’ Motion to Amend the Complaint. The Court further GRANTS
the motions to dismiss of Defendants Citibank, Nationstar, the Law Enforcement Defendants,
and the Law Firm Defendants. In light of the decision on Defendants’ motions to dismiss,
Plaintiffs’ Motion for Preliminary Injunction and Temporary Restraining Order is DENIED AS
longer included any mention of her. See Am. Compl., ECF No. [48-1]. Accordingly, the Court
will treat Defendant Viana G. Barbu as voluntarily dismissed from this case.
2
Plaintiffs’ Motion to Amend/Correct Complaint, ECF No. [48]; Nationstar Mortgage
LLC’s Motion to Dismiss (“Nationstar’s MTD”), ECF No. [7]; TFLG A Law Corporation & Eric
G. Fernandez’s Motion to Dismiss (“Law Firm Defendants’ MTD”), ECF No. [8]; Thomas
Allman & Mendocino County Sheriff’s Department’s Motion to Dismiss (“Law Enforcement
Defendants’ MTD”), ECF No. [20]; Citibank, N.A.’s Motion to Dismiss (“Citibank’s MTD”),
ECF No. [39]; Plaintiffs’ Opposition to Nationstar’s MTD (“Pl.s’ Nationstar Opp’n”), ECF No.
[32]; Plaintiffs’ Opposition to Law Firm Defendants’ MTD (“Pl.s’ Law Firm Opp’n”), ECF No.
[33]; Plaintiffs’ Opposition to Law Enforcement Defendants’ Motion to Dismiss (“Pl.s’ Law
Enforcement Opp’n”), ECF No. [46]; Plaintiffs’ Opposition to Citibank’s Motion to Dismiss
(“Pl.s’ Citibank Opp’n”), ECF No. [50]; Nationstar’s Reply to Plaintiffs’ Opposition to Motion
to Dismiss (“Nationstar’s Reply”), ECF No. [44]; Law Firm Defendants’ Reply to Plaintiffs’
Opposition to Motion to Dismiss (“Law Firm Defendants’ Reply”), ECF No. [45]; Law
Enforcement Defendants’ Reply to Plaintiffs’ Opposition to Motion to Dismiss (“Law
Enforcement Defendants’ Reply”), ECF No. [42]; Citibank’s Reply to Plaintiffs’ Opposition to
Motion to Dismiss (“Citibank’s Reply”), ECF No. [53]; Plaintiffs’ Amended Motion for
Preliminary Injunction and Motion for Temporary Restraining Order (“Pl.s’ PI”), ECF No. [30];
Law Firm Defendants’ Opposition to Plaintiffs’ PI, ECF No. [16]; Nationstar’s Opposition to
Plaintiffs’ PI, ECF No. [17]; Law Enforcement Defendants’ Opposition to Plaintiffs’ PI, ECF
No. [27]; Plaintiffs’ Reply to Nationstar’s Opposition to Plaintiffs’ PI, ECF No. [35]; Plaintiffs’
Reply to the Law Firm Defendants’ Opposition to Plaintiffs’ PI, ECF No. [36]; Plaintiffs’ Reply
to Law Enforcement Defendants’ Opposition to Plaintiffs’ PI, ECF No. [37].
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MOOT. The Court shall not address Plaintiffs’ Motion for Preliminary Injunction in this
Memorandum Opinion, but only Defendants’ Motions to Dismiss.
I. BACKGROUND
Before proceeding to the facts of this case, the Court shall address Plaintiffs’ Motion to
Amend the Complaint. Plaintiffs properly filed a Motion to Amend the Complaint on October
14, 2014.3 Plaintiffs’ proposed Amended Complaint contained few substantive changes. Rather,
the primary change was a three-page summary of Plaintiffs’ claims added to the beginning of the
Complaint in an attempt to clarify the exact nature of Plaintiffs’ claims per the Court’s
instructions in its August 21, 2014, Order. See Order (Aug. 21, 2014), ECF No. [15]. The Court
ordered Defendants to file a Notice with the Court indicating any objections to Plaintiffs’
Amended Complaint and indicating whether their motions to dismiss—which had all been filed
prior to Plaintiffs properly filing their Motion to Amend THE Complaint—were still applicable
to the Amended Complaint in the event the Court were to grant Plaintiffs leave to amend their
Complaint. See Order (Oct. 2, 2014), ECF No. [43]. Defendants indicate that they oppose
Plaintiffs’ Amended Complaint because it merely restates the same facts as the original
Complaint in different terms, but affirm that all of their arguments in their respective motions to
dismiss remain applicable. In light of the attempt at clarifying Plaintiffs’ claims included at the
beginning of Plaintiffs’ Amended Complaint, the non-substantive nature of the changes in
Plaintiffs’ Amended Complaint, and the fact that Defendants’ motions to dismiss apply with
3
Plaintiffs initially attempted to file an Amended Complaint on September 3, 2014,
however, they only filed the Amended Complaint and did not include a motion seeking the
Court’s leave to amend their Complaint. Accordingly, the Court denied Plaintiffs leave to file
their Amended Complaint on the public docket. On September 10, 2014, Plaintiffs filed a
Motion to Amend Complaint, but did not attach their proposed amended complaint to the
Motion. Plaintiffs finally properly filed a Motion to Amend Complaint with an attached
proposed amended complaint on October 14, 2014.
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equal force to the Amended Complaint, the Court shall GRANT Plaintiffs leave to file their
Amended Complaint.
A. Factual Background
For the purposes of these motions to dismiss, the Court accepts as true the well-pleaded
allegations in Plaintiffs’ Amended Complaint. The Court has been able to discern the following
facts from Plaintiffs’ lengthy and often rambling Amended Complaint.
Plaintiffs’ claims arise out of a July 15, 2004, mortgage transaction with Lehman
Brothers Bank FSB, evidenced by a promissory note (“the Note”) in the amount of $520,000
(“the Loan”), and secured by a Deed of Trust placing a lien on certain real property located at
29850 Ten Mile Road, Point Arena, California 95468 (“the Property”). Am. Compl. ¶ 14. The
mortgage servicer for Plaintiffs’ Loan at the time the Loan was originally made was Aurora Loan
Services. Id. ¶ 13. The Mortgage and Note were securitized and sold to a REMIC known as
Structured Asset Securities Corporation Mortgage Loan Trust 2005-2XS. Id. ¶ 1. Plaintiffs
allege that Citibank, NA is the Securities Administrator for the REMIC. Id. ¶¶ 1, 4. In June of
2012, Lehman Brothers sold the assets of Aurora Bank, FSB and Aurora Loan Servicing to
Nationstar Mortgage LLC. Id. ¶ 4. The Mortgage Electronic Registration System (“MERS”)
assigned Plaintiffs’ note and Deed of Trust to Nationstar on December 11, 2012. Id. ¶¶ 11, 12,
Ex. B (Assignment of Deed of Trust). Nationstar began servicing Plaintiffs’ Loan. Id. ¶ 4.
Plaintiffs defaulted on their obligation to repay the Loan in or around October 2013. See
Id. at Ex. E (Notice of Default). Plaintiffs do not contest that they defaulted on their Loan and
owe money. Plaintiffs received a Notice of Default from Nationstar on or around October 17,
2013. Id. Plaintiffs allege that Citibank is using Nationstar as their proxy and agent with respect
to the foreclosure and eviction. Id. ¶ 62. Plaintiffs’ property was sold to Nationstar in a non-
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judicial foreclosure sale on or around February 14, 2014.4 Id. ¶ 39, Ex. F (Notice of Trustee’s
Sale); Nationstar MTD at 2.
On March 28, 2014, Nationstar filed an unlawful detainer proceeding against Plaintiffs in
California state court. Am. Compl. ¶ 94, Ex. F* (Unlawful Detainer Compl.).5 TFLG A Law
Corporation represented Nationstar in the unlawful detainer proceeding. Id. ¶ 58, Ex. F*
(Unlawful Detainer Compl.). Judgment was entered against Plaintiffs Segelstrom and Hamer on
August 8, 2014, and a writ of possession was issued on August 29, 2014. See Notice of Related
Case, ECF No. [22], Ex. B (Unlawful Detainer Judgment). Plaintiffs allege that Mendocino
County Sheriff Thomas Allman and the Mendocino County Sheriff’s Department are acting as
agents for Nationstar in Nationstar’s efforts to foreclose on and evict Plaintiffs from their home.
Am. Compl. ¶ 4. The Mendocino County Sheriff’s Department has indicated that they “intend to
await a ruling from this Court on the TRO motion before enforcing the Writ [of possession].”
Notice of Related Case, at 2.
B. Procedural History
Plaintiffs filed suit in this Court on June 25, 2014, against Citibank, Nationstar, and the
Law Firm and Law Enforcement Defendants challenging the foreclosure and eviction
proceedings with regards to their property and bringing several claims under the False Claims
4
The parties appear to dispute whether the public auction discussed in the Notice of
Trustee’s Sale actually took place. Plaintiffs contend that the public auction was scheduled for
February 14, 2014, but was cancelled and “no actual Trustee Sale’s/public auction ever
occurred.” Am. Compl. ¶¶ 38-39. As discussed infra, whether or not Plaintiffs’ property was
foreclosed on by an actual public auction is immaterial to Plaintiffs’ wrongful foreclosure claim
as Plaintiffs do not dispute that they were in default on their loan and thus subject to foreclosure.
See Part b.i.
5
The exhibits attached to Plaintiffs’ Amended Complaint appear to contain two Exhibit
“F”s. The Court shall reference the second Exhibit F as Exhibit “F*” in order to avoid
confusion.
5
Act. Defendant Nationstar and the Law Firm Defendants filed motions to dismiss on August 4,
2014. On August 8, 2014, Plaintiff Segelstrom filed a voluntary petition for bankruptcy in the
United States Bankruptcy Court for the Northern District of California. See Suggestion of
Bankruptcy, ECF No. [11]. Shortly thereafter, Plaintiffs filed a Motion for Preliminary
Injunction or Temporary Restraining Order in this Court. In light of Plaintiff Segelstrom’s
pending voluntary petition for bankruptcy, the Court stayed this case as to Plaintiff Segelstrom
until resolution of Plaintiff Segelstrom’s bankruptcy matter, or until Plaintiff Segelstrom
withdrew his bankruptcy petition. See Order (Aug. 21, 2014), ECF No. [14]. However, as
Plaintiff Hamer was not included in the petition for bankruptcy, the Court set a briefing
scheduling for Plaintiff Hamer to respond to Defendants’ motions to dismiss and to further brief
Plaintiffs’ Motion for Preliminary Injunction and Temporary Restraining Order.
The Law Enforcement Defendants filed a Motion to Dismiss on August 28, 2014. On
September 3, 2014, the Court lifted the stay in this matter as to Plaintiff Segelstrom upon
learning that Plaintiff Segelstrom’s bankruptcy petition in the U.S. Bankruptcy Court of the
Northern District of California had recently been dismissed. See Order (Sept. 3, 2014), ECF No.
[23]. The Court set a briefing schedule for Plaintiff Segelstrom to respond to Defendants’
motions to dismiss and to further brief Plaintiffs’ Motion for Preliminary Injunction and
Temporary Restraining Order. The Court put Plaintiffs on notice “that the resolution of their
Motion for Preliminary Injunction and Motion for Temporary Restraining Order [would] be
delayed because of the stay that the Court was required to impose.” Id. at 3. The Court found
that “[a]s only one property is at issue in which both Plaintiffs have an interest, . . . it [would]
have a more complete record on which to rule if it wait[ed] for both Plaintiffs to complete their
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briefing of their Motion and resolve[d] the Plaintiffs’ Motion for Preliminary Injunction and
Motion for Temporary Restraining Order in one order addressing both parties’ arguments. Id.Defendant Citibank filed a Motion to Dismiss on September 29, 2014. On October 14,
2014, Plaintiffs properly filed a Motion for Leave to file an Amended Complaint. As discussed
above, while certain Defendants opposed Plaintiffs’ Motion to Amend Complaint, all Defendants
indicated that the motions to dismiss they filed prior to Plaintiffs filing their Amended Complaint
still applied fully to Plaintiffs’ Amended Complaint.
As all motions have now been fully briefed, this matter is ripe for the Court’s review. In
short, the Law Firm Defendants seek to dismiss Plaintiffs’ Amended Complaint arguing that this
Court lacks personal jurisdiction over them and that Plaintiffs have not stated any claim against
them. Similarly, the Law Enforcement Defendants seek to dismiss Plaintiffs’ Amended
Complaint on the basis of personal jurisdiction and failure to state a claim. The Law
Enforcement Defendants also argue that this Court lacks subject matter jurisdiction over
Plaintiffs’ claims pursuant to the Rooker-Feldman doctrine and, alternatively, that venue is
improper in this Court. The Rooker-Feldman doctrine does not bar this Court’s subject matter
jurisdiction over Plaintiffs’ claims.6 The Court will only address the Law Firm and Law
6
The Law Enforcement Defendants contend that the Rooker-Feldman doctrine should
bar the Court’s subject matter jurisdiction over this case because it bars jurisdiction over cases
involving collateral attacks on state court foreclosure judgments. Law Enforcement Defendants’
MTD at 6. According to Defendants, as “[t]he core of Plaintiffs’ allegation[s] focuses on the
foreclosure of Plaintiffs’ home and the eviction action pending against them in the Superior
Court of California, County of Mendocino,” consideration of Plaintiffs’ allegations must be
barred under Rooker-Feldman. Id. The Rooker-Feldman doctrine, however, only bars a federal
court from exercising jurisdiction over a claim effectively attacking a state court final judgment
that was entered before Plaintiffs filed the federal court complaint. See Exxon Mobil Corp. v.
Saudi Basic Indus., 544 U.S. 280, 284 (2005) (confining application of the
Rooker/Feldman doctrine to “cases of the kind from which the doctrine acquired its name: cases
brought by state-court losers complaining of injuries caused by state-court judgments rendered
before the district court proceedings commenced and inviting district court review and rejection
7
Enforcement Defendants’ personal jurisdiction arguments since they resolve this case as to these
Defendants.
Defendants Nationstar and Citibank seek to dismiss Plaintiffs’ Amended Complaint on the
basis that Plaintiffs have failed to state a claim. Defendant Citibank also moves for dismissal on
the basis that venue is improper in this Court. The Court will evaluate Plaintiffs’ claims as they
relate to Defendants Nationstar and Citibank under Federal Rule of Civil Procedure 12(b)(6), as
the Court finds this case is most efficiently resolved by addressing the merits of Plaintiffs’ claims
against these Defendants.
of those judgments.”) Here, the foreclosure proceeding at issue was a non-judicial foreclosure
proceeding and did not involve a final state court judgment that would implicate Rooker-
Feldman. The unlawful detainer proceeding which Plaintiffs also attack was filed by Nationstar
on March 28, 2014, but judgment was not entered in that proceeding until August 8, 2014—over
a month after Plaintiffs filed their federal complaint in this Court. See Notice of Related Case,
ECF No. [22], Ex. B (Unlawful Detainer Judgment). Accordingly, the Rooker-Feldman doctrine
does not present a jurisdictional bar in this case. See Exxon Mobil Corp., 544 U.S. at 292(“[N]either Rooker nor Feldman supports the notion that properly invoked concurrent
jurisdiction vanishes if a state court reaches judgment on the same or related question while the
case remains sub judice in a federal court.”).
Even though Rooker-Feldman does not bar the Court’s jurisdiction over Plaintiffs’
claims, it is possible that the Court’s review of certain of Plaintiffs’ claims is precluded by res
judicata now that a final judgment has been entered in the unlawful detainer proceeding. Id. at
293 (“[d]isposition of the federal action, once the state-court adjudication is complete, would be
governed by preclusion law.”). As the Court is dismissing the Law Firm and Law Enforcement
Defendants because the Court lacks personal jurisdiction over them, the Court need only
consider the preclusive effect of res judicata for Defendants Citibank and Nationstar. However,
neither Citibank nor Nationstar raise res judicata—which is an affirmative defense—in their
motions to dismiss. Accordingly, the Court will not address res judicata and will dispose of
Plaintiffs’ claims against these Defendants pursuant to Federal Rule of Civil Procedure 12(b)(6).
Nevertheless, as Nationstar does invoke res judicata in its Opposition to Plaintiffs’ Motion for
Preliminary Injunction and Temporary Restraining Order, the Court will note that res judicata
would likely require the dismissal of Plaintiffs’ claims which should have been raised in the
unlawful detainer proceeding either as a defense or counterclaim. In any event, the Court
dismisses all of Plaintiffs’ claims with regards to Nationstar and Citibank pursuant to 12(b)(6).
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II. LEGAL STANDARD
A. Rule 12(b)(2)
When personal jurisdiction is challenged under Rule 12(b)(2), the plaintiff bears the
burden of establishing a factual basis for asserting personal jurisdiction over a defendant. See
Crane v. N.Y. Zoological Soc’y, 894 F.2d 454, 456 (D.C. Cir. 1990). To establish that personal
jurisdiction exists, the plaintiff cannot rest on bare allegations or conclusory statements but
“must allege specific acts connecting [each] defendant with the forum.” Second Amendment
Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001) (internal quotation
omitted). “To make such a showing, the plaintiff is not required to adduce evidence that meets
the standards of admissibility reserved for summary judgment and trial[;]” but rather, the
plaintiff may “rest [his] arguments on the pleadings, ‘bolstered by such affidavits and other
written materials as [he] can otherwise obtain.’ ” Urban Inst. v. FINCON Servs., 681 F.Supp.2d
41, 44 (D.D.C. 2010) (quoting Mwani v. bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005)). In the case
of a pro se plaintiff, although the Court is required to construe the pro se complaint liberally, see
Howerton v. Ogletree, 466 F.Supp.2d 182, 183 (D.D.C. 2006), “[p]ro se plaintiffs are not freed
from the requirement to plead an adequate jurisdictional basis for their claims.” Gomez v.
Aragon, 705 F.Supp.2d 21, 23 (D.D.C. 2010) (citation omitted).
B. Rule 12(b)(6)
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a
complaint on the grounds it “fail[s] to state a claim upon which relief can be granted.” Fed. R.
Civ. P. 12(b)(6). The Federal Rules of Civil Procedure require that a complaint contain “ ‘a short
and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give
the defendant fair notice of what the . . . claim is and the grounds upon which it rests.’ ” Bell Atl.
9
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957));
accord Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam). “[A] complaint [does not]
suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557). Rather, a complaint must
contain sufficient factual allegations that, if accepted as true, “state a claim to relief that is
plausible on its face.” Twombly, 550 U.S. at 570. “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.
In evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, a court must
construe the complaint in the light most favorable to the plaintiff and must accept as true all
reasonable factual inferences drawn from well-pleaded factual allegations. In re United Mine
Workers of Am. Employee Benefit Plans Litig., 854 F.Supp. 914, 915 (D.D.C.1994). Further, in
deciding a Rule 12(b)(6) motion, a court may consider “the facts alleged in the complaint,
documents attached as exhibits or incorporated by reference in the complaint,” or “documents
upon which the plaintiff's complaint necessarily relies even if the document is produced not by
the plaintiff in the complaint but by the defendant in a motion to dismiss.” Ward v. D.C. Dep’t
of Youth Rehab. Servs., 768 F.Supp.2d 117, 119 (D.D.C. 2011) (citations omitted).
III. DISCUSSION
In Plaintiffs’ Amended Complaint, Plaintiffs clarify that they are bringing two sets of
claims in this matter: (1) claims challenging the foreclosure and eviction proceedings against
Plaintiffs (Counts I and VI), and (2) four False Claims Act (“FCA”) claims (Counts II-V). See
Am. Compl. ¶¶ 1-2. The Court will first address whether it has personal jurisdiction over the
Law Enforcement and Law Firm Defendants since these two defendants raised personal
10
jurisdiction as a defense. The Court will next turn to Plaintiffs’ FCA claims and then to
Plaintiffs’ challenges to the underlying foreclosure and eviction proceedings and evaluate
whether Plaintiffs have stated any viable claim against the remaining Defendants, Citibank and
Nationstar. Ultimately, the Court finds that Plaintiffs have failed to establish that this Court has
personal jurisdiction over the Law Enforcement and Law Firm Defendants and, accordingly,
those Defendants must be dismissed from this case. The Court further finds that Plaintiffs’ FCA
claims are fatally flawed on procedural grounds and that Plaintiffs have failed to state a claim
relating to the underlying foreclosure and eviction proceedings. As no viable claims thus remain
against Defendants Citibank and Nationstar, this case must be dismissed in its entirety.
A. Dismissal for Lack of Personal Jurisdiction over Law Enforcement and Law Firm
Defendants
The Law Enforcement and Law Firm Defendants each move to dismiss Plaintiffs’
Amended Complaint for, inter alia, lack of personal jurisdiction. The Court agrees that Plaintiffs
have failed to establish personal jurisdiction over these Defendants and, accordingly, Plaintiffs’
claims against these Defendants are dismissed pursuant to Federal Rule of Civil Procedure
12(b)(2).7
In this Circuit, courts determine whether personal jurisdiction may be exercised “by
reference to District of Columbia law.” United States v. Ferrara, 54 F.3d 825, 828 (D.C. Cir.
1995). “A District of Columbia court may exercise personal jurisdiction over a person domiciled
7
Because the Court concludes that these Defendants should be dismissed for lack of
personal jurisdiction, it does not address their remaining grounds for dismissal. However, the
Court does note that the two FCA claims against the Law Firm Defendants (Counts IV and V)
would be dismissed for failure to state a claim and the remaining claims challenging the
foreclosure and eviction proceedings that Plaintiffs appear to lodge against all Defendants would
also be dismissed for failure to state a claim. Accordingly, the Law Enforcement and Law Firm
Defendants would also be dismissed for Plaintiffs’ failure to state a claim against them upon
which relief could be granted.
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in, organized under the laws of, or maintaining his or its principal place of business in, the
District of Columbia as to any claim for relief.” D.C. Code § 13-422. Exercise of this so-called
“general jurisdiction” requires that the defendant’s contacts within the forum be “continuous and
systematic” in order for the defendant to be forced to defend a suit arising out of any subject
matter unrelated to the defendant’s activities within the forum. See Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984). Alternatively, this Court may exercise
“specific jurisdiction” to entertain controversies based on acts of a defendant that “touch and
concern the forum.” Kopff v. Battaglia, 425 F.Supp.2d 76, 81 (D.D.C. 2006) (citing Steinberg v.
Int'l Criminal Police Org., 672 F.2d 927, 928 (D.C. Cir. 1981)).
To determine whether it may exercise specific jurisdiction over a particular defendant, a
court must engage in a two-part inquiry. First, the Court must determine that the District of
Columbia’s long arm statute, D.C. Code § 13-423, authorizes jurisdiction.8 See GTE New Media
Servs., Inc. v. Bell-South Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000). See also Edmond v.
United States Postal Serv. Gen. Counsel, 949 F.2d 415, 424 (D.C. Cir. 1991) (even when subject
matter jurisdiction is predicated on federal question, plaintiffs must rely on the D.C. long-arm
statute to assert personal jurisdiction over out-of-district defendants). Second, the court must
8
The D.C. long-arm statute provides that a District of Columbia court may exercise
personal jurisdiction over a person as to a claim for relief arising from the person’s: (1)
transacting any business in the District of Columbia; (2) contracting to supply services in the
District of Columbia; (3) causing tortious injury in the District of Columbia by an act or
omission in the District of Columbia; (4) causing tortious injury in the District of Columbia by
an act or omission outside the District of Columbia if he regularly does or solicits business,
engages in any other persistent course of conduct, or derives substantial revenue from goods
used or consumed, or services rendered, in the District of Columbia; (5) having an interest in,
using, or possessing real property in the District of Columbia; (6) contracting to insure or act as
surety for or on any person, property, or risk, contract, obligation, or agreement located,
executed, or to be performed within the District of Columbia at the time of the contracting,
unless the parties otherwise provide in writing; or (7) marital or parent and child relationship in
the District of Columbia (subject to certain enumerated conditions). D.C. Code § 13-423.
12
find that exercise of jurisdiction comports with the requirements of constitutional due process.
See GTE New Media Servs., 199 F.3d at 1347. This determination turns on whether a
defendant's “minimum contacts” with the District of Columbia establish 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) (internal citation and quotation marks omitted).
Such minimum contacts must arise from some act by which the defendant “purposefully
avails” himself of the privilege of conducting activities within the District of Columbia, thus
invoking the “benefits and protections of its laws.” Asahi Metal Indus. Co. v. Super. Ct. of Cal.,
Solano Cty., 480 U.S. 102, 109 (1987). Put differently, the court “must insure that the
defendant’s conduct and connection with the forum ‘are such that he should reasonably
anticipate being hauled into court there.’” Marshall v. Labor & Indus., State of Washington, 89
F.Supp.2d 4, 9 (D.D.C. 2000) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
297, (1980)).
Here, Plaintiffs’ Amended Complaint fails entirely to demonstrate that this Court has
personal jurisdiction over the Law Enforcement and Law Firm Defendants. The Complaint
alleges no facts suggesting that these Defendants transacted business, contracted to supply
services, or caused tortious injury in the District of Columbia. Indeed, the only mention of
personal jurisdiction, which is found in Plaintiffs’ Opposition, is the following:
The long Arm Statute in Washington, DC provides for the personal jurisdiction
of the Defendant when they have entered into a contract for services, or have
conducted business in Washington, DC. The opposing counsel has failed to
connect the dots with respect to the fact that NATIONSTAR MORTGAGE,
LLC has engaged in a business with CITIBANK, NA to participate in a
business transaction that is prohibited under the Consent Judgment. . . . By any
test of legal theory about what constitutes a contract, this is a contract under the
laws governing Washington, D.C.
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Pl.s’ Law Enforcement Opp’n. at 6, ¶ 10; Pl.s’ Law Firm Opp’n at 6, ¶ 10. It appears Plaintiffs
are arguing that the Court has personal jurisdiction over all Defendants in this case because
Defendant Citibank was party to an unrelated consent judgment issued in the District Court of
the District of Columbia and the business transaction at issue in the present case allegedly
violated that consent judgment. As discussed, infra, Plaintiffs have failed to state a claim against
Defendants for violation of the Consent Judgment in United States v. Bank of America Corp., et
al., No. 12-0361 (D.D.C. Apr. 4, 2012), the alleged “contract” entered into by Citibank.
Nevertheless, even ignoring this fact for the moment, Plaintiffs have alleged no facts linking the
Law Enforcement or the Law Firm Defendants to this “contract” or to activities within the
District of Columbia. The alleged actionable conduct on the part of the Law Firm Defendants
arises out of their legal representation of Nationstar in the unlawful detainer action filed against
the Plaintiffs in the Superior Court of Mendocino County, California, relating to property in
California. Law Firm Defendants’ MTD, Ex. 1 (Fernandez Decl.), ¶ 1. The acts for which the
Sheriff of Mendocino County is sought to be held liable in and/or enjoined in this action are
all actions that the Sheriff would take in the normal course and scope of his official duties
within the County of Mendocino, State of California, not in the District of Columbia. Law
Enforcement Defendants’ MTD, Ex A. (Allman Decl.), ¶ 9.
Moreover, these Defendants do not reside within the District of Columbia, and their
principal places of business are outside of the District. TFLG A Law Corporation (“TFLG”) is a
California law firm, of which Defendant Fernandez is a partner, with its only office in that state.
Law Firm Defendants’ MTD, Ex. 1 (Fernandez Decl.), ¶¶ 1, 7. TFLG is not engaged in the
practice of law in the District of Columbia, and none of its lawyers are admitted to practice
before the courts of the District of Columbia. Id. ¶ 7. Similarly, Defendant Mendocino County
14
Sheriff’s Department does not do business, advertise, or contract with persons in the District of
Columbia and has no subsidiaries, offices, or employees in the District of Columbia. Law
Enforcement Defendants’ MTD, Ex. A (Allman Decl.) ¶¶ 7-8, 7*.9 Defendant Mendocino
County Sheriff Thomas Allman whom Plaintiffs are suing in his personal and official capacity
has never resided in, been domiciled in, been employed in, or done business in the District of
Columbia. Id. ¶ 5. Accordingly, because Plaintiffs have failed to demonstrate that the Law Firm
and Law Enforcement Defendants possess any “contacts” whatsoever with the District of
Columbia—and certainly no contacts sufficient to satisfy the requirements of either general or
specific jurisdiction set forth above—this Court finds itself without personal jurisdiction over
Plaintiffs’ claims against them.
B. Dismissal Pursuant to Rule 12(b)(6): Failure to State a Claim
Based on the preceding discussion, the only remaining Defendants in this suit are
Citibank and Nationstar. Accordingly, the Court discusses Plaintiffs’ claims as they relate to
Citibank and Nationstar.
a. False Claims Act Counts
Plaintiffs make four FCA claims against Defendants Citibank and Nationstar pursuant to
31 U.S.C. § 3729(a)(1)(A), (B), (D), and (G). See Am. Compl. ¶¶ 97-128. The Court need not
delve into the details of these claims because Plaintiffs have failed to comply with the procedures
for filing a claim under the FCA and, thus, Plaintiffs’ FCA claims must be dismissed with
prejudice. See Taitz v. Obama, 707 F. Supp. 2d 1, 4 (D.D.C. 2010) (“Failure to comply with
these filing procedures results in dismissal of the relator’s suit with prejudice.”). To bring a
claim under the False Claims Act, it must be filed under seal on behalf of the United States and
9
Sherriff Allman’s declaration is incorrectly numbered and includes two paragraphs “6”
and “7” on the second page. The Court has identified the second paragraph “7” as “7*”.
15
not served on the defendant until ordered by the court. 31 U.S.C. § 3730(b)(2). Here, Plaintiffs
did not file their Complaint or Amended Complaint under seal and appear to have served the
initial Complaint and Amended Complaint directly on Defendants. Accordingly, on this basis
alone Plaintiffs’ FCA claims must be dismissed with prejudice. See Nattah v. Bush, 541 F. Supp.
2d 223, 239 (D.D.C. 2008), aff’d in part, rev’d in part on other grounds, 605 F.3d 1052 (D.C.
Cir. 2010); United States ex rel. Foster v. Savannah Communication, 140 Fed. Appx. 905, 908,
2005 WL 1719221 (11th Cir. July 25, 2005) (affirming dismissal of qui tam action for failure to
file the complaint under seal or comply with any of the other procedural filing requirements).
Even more importantly, Plaintiffs are proceeding pro se and thus cannot bring a qui tam
action ex relatione as they allege they are seeking to do. See Am. Compl. ¶ 3 (alleging that
“Plaintiffs are private attorneys general, pursuant to the sections of Title 18 authorizing the
Plaintiffs to act . . . [and] the Plaintiffs are about to suffer irreparable harm and thus the Plaintiffs
are authorized to appear Ex Relatione . . .”); ¶ 5 (“the Plaintiff’s [sic] are appearing Ex Rel . . .”);
¶ 53 (“Pursuant to the Federal Civil False Claims Act, 31 U.S.C. § 3729 et seq. (the “FCA”),
Relators seek to recover, on behalf of the United States of America, damages and civil penalties
arising from the sale by Defendants of MBS, and other forms of asset-backed securities, using
funds provided by the United States (“U.S.”) government.”). It is well-established law that “a
relator in a qui tam action may not proceed pro se.” Anaviev v. Freitas, et al., --- F. Supp. 2d ---,
No. 13-00341, 2014 WL 1400857, at *6 (D.D.C. Apr. 11, 2014); U.S. ex rel. Fisher v. Network
Software Assocs., 377 F. Supp. 2d 195, 196 (D.D.C. 2005); Rockefeller v. Westinghouse Elec.
Co., 274 F. Supp. 2d 10, 16 (D.D.C.) (holding that “[t]he need for adequate legal representation
on behalf of the United States is obviously essential.”). For each of the foregoing reasons,
16
Counts II through V fail to state a claim upon which relief could be granted and, accordingly,
must be dismissed.
b. Claims Challenging Foreclosure and Eviction Proceedings
Plaintiffs formally assert two counts challenging the foreclosure and eviction proceedings
against Plaintiffs. In addition, the Court discerns several claims within these counts and
throughout Plaintiffs’ Amended Complaint that the Court will address in turn.
i. Standing to Foreclose on Plaintiffs’ Mortgage
Plaintiffs’ Amended Complaint, citing to various California statutes and provisions of the
Uniform Commercial Code,10 alleges that Defendants lack standing to foreclose on their home
because “defendants have not established, with admissible evidence, that any of them are the
holder of the note or holder of the Deed of Trust . . . .” Am. Compl. ¶ 93. Specifically, Plaintiffs
allege that, for several reasons, Defendants were not properly assigned the note or the Deed of
Trust and thus cannot establish that they have standing to foreclose on Plaintiffs’ home.
Plaintiffs also allege that Defendants do not have standing to foreclose on Plaintiffs’ home
because Plaintiffs’ loan was securitized and because Defendants have not provided documented
proof to demonstrate they possess the original note or otherwise documented their interest in the
note. Accordingly, Plaintiffs contend that because Defendants are strangers to their loan, their
efforts to foreclose are improper. Id. ¶ 8.
10
Plaintiffs repeatedly invoke various provisions of the Uniform Commercial Code
(“UCC”) arguing that Defendants have violated its requirements. See, e.g., Am. Compl. ¶¶ 8, 11,
13, 42, 43, 51, 52, 60, 69, 94. However, these provisions are inapposite here. As California
courts have held, the UCC does not apply to California’s non-judicial foreclosure proceedings.
See Rieger v. Wells Fargo Bank, N.A., No. 3:13-0749, 2013 WL 1748045, at *7 (N.D. Cal. Apr.
23, 2013) (“California Civil Code section 2924, not the UCC, governs nonjudicial
foreclosures.”).
17
California courts have repeatedly and consistently rejected claims akin to Plaintiffs’
claims. Specifically, California courts consistently reject the argument that securitization
precludes a foreclosure action. See, e.g., Preciado v. Wells Fargo Home Mortg., No. 13-00382
LB, 2013 WL 1899929, at *5 (N.D. Cal. May 7, 2013) (“the weight of persuasive authority in
this district is that a plaintiff has ‘no standing to challenge foreclosure based on a loan’s having
been securitized.’”) (quoting Niranjan v. Bank of America, N.A., No. C 12-05706, 2013 WL
1701602, at *2 (N.D. Cal. April 18, 2013)); McGough v. Wells Fargo Bank, N.A., No. C12-0050,
2012 WL 2277931, at *4 (N.D. Cal. June 18, 2012) (“Theories that securitization undermines the
lender’s right to foreclose on a property have been rejected by the courts.”); Wadhwa v. Aurora
Loan Servs., LLC, No. S-11-1784, 2011 WL 2681483, at *4 (E.D. Cal. July 8, 2011) (noting that
“this position has been rejected by numerous courts”); Flores v. GMAC Mortg., LLC, No. C 12-
794, 2013 WL 2049388, at *2 (N.D. Cal. May 14, 2013) (“[plaintiff contends that] because MIT
securitized the note, this allegedly stripped MERS of any ability to assign the deed of trust.
Courts have consistently rejected this theory.”); Lane v. Vitek Real Estate Indus. Group, 713
F.Supp.2d 1092, 1099 (E.D. Cal. 2010) (“The argument that parties lose their interest in a loan
when it is assigned to a trust pool has also been rejected by many district courts.”).
California courts have also rejected Plaintiffs’ argument that Defendants must
demonstrate their legal possession of the note (as well as physical possession of the original copy
of the note) in order to foreclose. “California appellate courts have consistently rejected the
theory that California’s nonjudicial foreclosure scheme (Cal. Civ. Code §§ 2924-2924k) requires
a foreclosing party to have a beneficial interest in or physical possession of the note.” McNeil v.
Wells Fargo Bank, N.A., No. 13-5519 SC, 2014 WL 2967629, at *3 (N.D. Cal. July 1, 2014).
See also Jenkins v. JP Morgan Chase Bank, 156 Cal. Rptr. 3d 912, 925 (Cal. Ct. App. 2013)
18
(“the foreclosing beneficiary-creditor need not produce the promissory note or otherwise prove it
holds the note to nonjudicially foreclose on a real property security.”); Garcia v. Federal Home
Loan Mortgage Corp., No. 1:12-cv-00397, 2012 WL 3756307, at *4 (E.D. Cal. 2012) (“the
California nonjudicial foreclosure process does not require physical possession of the note by the
party initiating foreclosure.”); Jahaveri v. JP Morgan Chase Bank, N.A., No. CV10-08185, 2011
WL 1131518, at *2 (C.D. Cal. Mar. 24, 2011) (“Nothing in [California Civil Code § 2924]
requires the entity initiating foreclosure to have physical possession of the note. Indeed, courts
have uniformly found that ‘physical possession of the original promissory note is not a pre-
requisite to initiating foreclosure proceedings.’”) (quoting Nguyen v. Lasalle Bank Nat’l Ass’n,
No. SACV 09-0881, 2009 WL 3297269, at *3 (C.D. Cal. Oct. 13, 2009)); Heald v. Nat’l City
Mortg., No. 11CV904, 2011 WL 5513226, at *5 (S.D. Cal. Nov. 10, 2011) (“to the extent that
Plaintiff’s wrongful foreclosure claim is based on the fact that Defendants do not possess the
‘genuine original’ promissory note, allonge, or deed of trust it necessarily fails as well.
California does not require possession of the original note before initiating a foreclosure.”)
(internal citation omitted).
As for Plaintiffs’ argument that the note and Deed of Trust were not properly assigned
and thus Defendants cannot foreclose on Plaintiffs because they cannot show they have an
ownership interest in the note or Deed of Trust, this claim must fail because Plaintiffs have not
alleged prejudice.11 Under California law, in order to maintain a wrongful foreclosure claim,
“Plaintiffs must allege that (1) Defendants caused an illegal, fraudulent, or willfully oppressive
sale of the property pursuant to a power of sale in a mortgage or deed of trust; (2) Plaintiffs
suffered prejudice or harm; and (3) Plaintiffs tendered the amount of the secured indebtedness or
11
Indeed, all of Plaintiffs’ challenges to the foreclosure and eviction proceedings must
fail because Plaintiffs have not alleged prejudice.
19
were excused from tendering.” Nugent v. Fed. Home Loan Mortgage Corp., No. 2:12-cv-00091,
2013 WL 1326425, at *7 (E.D. Cal. Mar. 29, 2013). “California courts have determined [that]
plaintiffs are unable to show prejudice when the borrowers were in default and the allegedly
improper assignment does not affect the borrower’s ability to pay . . . .” Lazo v. Summit
Management Co., No. 1:13-cv-02015, 2014 WL 3362289, at *10 (E.D. Cal. July 9, 2014). See
also Fontenot v. Wells Fargo Bank, N.A., 129 Cal. Rptr. 3d 467, 481 (Cal. Ct. App. 2011)
(finding no prejudice where borrower was in default and did not allege that transfer of note
interfered with borrower’s ability to pay); Siliga v. Mortg. Elec. Registration Sys., Inc., 161 Cal.
Rptr. 3d 500, 508 (Cal. Ct. App. 2013) (“The assignment of the deed of trust and the note did not
change [plaintiffs’] obligations under the note, and there is no reason to believe that . . . the
original lender would have refrained from foreclosure in these circumstances”). On this point,
then-Chief Judge Anthony Ishii of the United States District Court for the Eastern District of
California noted:
Regardless of alleged irregularities, Plaintiff remained obligated under the deed of
trust to faithfully make the required payments. Plaintiff does not contend that he
was not actually in default under the deed of trust. Plaintiff’s property would
therefore be subject to foreclosure even under an unimpeachable creditor, and any
alleged irregularities in the proceedings caused by Defendants have not made
Plaintiff worse off than he would have been in the absence of any problem.
Garcia, 2012 WL 3756307, at *5. Here, there is no dispute that Plaintiffs’ original loan was
valid and that Plaintiffs are in default on their loan. Rather, Plaintiffs devote their Amended
Complaint to alleging and arguing that Citibank and Nationstar are improper parties to foreclose
on him because the individual who authorized the assignment of the loan to Nationstar did not
have authority to execute such an assignment; Defendants did not provide the proper notification
regarding the assignment of the note; and interim assignments of the note were not recorded.
Yet, even if such irregularities occurred, Plaintiffs allege no prejudice from foreclosure based on
20
the three alleged regularities relating to the assignment of the note, and therefore their wrongful
foreclosure claim has no merit. See Siliga, 161 Cal. Rptr. 3d at 508 (“Absent any prejudice, the
[Plaintiffs] have no standing to complain about any alleged lack of authority or defective
assignment.”).
Plaintiffs also allege irregularities in the Notice of Default, foreclosure sale, and the
recording of the Trustee Deed. As with the alleged irregularities in the assignment of the note
and/or Deed of Trust, irregularities in the foreclosure process do not change the fact that
Plaintiffs were in default under the loan and subject to foreclosure. See Lazo, 2014 WL
3362289, at *10 (‘“mere irregularities’ in the foreclosure process are insufficient to show
prejudice.” (citing Fontenot v. Wells Fargo Bank., 129 Cal.Rptr.3d 467, 481 (Cal. Ct. App.
2011)). Consequently, “any irregularities in the proceedings caused by Defendants have not
made Plaintiff[s] worse off than [they] would have been in the absence of any problem.” Garcia,
2012 WL 3756307, at *5. Accordingly, the Court rejects Plaintiffs’ claims that Defendants lack
standing to foreclose on their property.
ii. Fraud
Plaintiffs’ fraud claim is similarly subject to dismissal. Plaintiffs appear to allege that
Defendants committed fraud when MERS assigned Plaintiffs’ mortgage from Lehman Brothers
to Nationstar because the individual signing off on the assignment on behalf of MERS was not
authorized to make the assignment. See Am. Compl. ¶ 13. First, to the extent that Plaintiffs
claim should be read as alleging that MERS procured a fraudulent assignment of Plaintiffs’
mortgage, this claim must fail because MERS is not a Defendant in this case. Even if Plaintiffs’
fraud claim can be read as alleging fraud by one of the two remaining Defendants—Citibank and
Nationstar—the Court concludes that Plaintiffs’ fraud claim must nevertheless be dismissed
21
because Plaintiffs have failed to allege or set out any actions taken by Plaintiffs in reliance on the
allegedly false statements made by Defendants.
In analyzing Plaintiffs’ fraud claim, the Court applies California law.12 Under California
law, a plaintiff must allege the following to support a claim of fraud: “a false representation,
knowledge of its falsity, intent to defraud, justifiable reliance, and damages.” Moore v. Brewster,
96 F.3d 1240, 1245 (9th Cir. 1996). Although Plaintiffs’ allegations about the MERS
assignment go to the “false representation” prong of this analysis, Plaintiffs’ claim nevertheless
fails because they have not alleged any actions taken by them in reliance on the allegedly false
statement by Defendants that MERS properly assigned Plaintiffs’ mortgage to Nationstar.
Rather, from the outset of this litigation, and apparently from the initiation of the foreclosure
proceedings against them by Nationstar, Plaintiffs have vigorously contested Defendants’
representations, arguing that Plaintiffs’ mortgage was fraudulently assigned to Nationstar and
that, as a result, Defendants do not have an ownership interest in their mortgage and lack the
power to foreclose on Plaintiffs’ home. “In alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Here,
Plaintiffs state with particularity the alleged fraudulent statements by Defendants, but their
Amended Complaint and briefing fail to specifically identify any actions they as Plaintiffs have
12
“In a diversity action, a federal district court applies the choice of law principles of the
state or jurisdiction in which it sits.” Lopez v. Council on American-Islamic Relations Action
Network, Inc., 741 F.Supp.2d 222, 234 (D.D.C. 2010). “The District of Columbia employs a
‘modified governmental interest analysis,’ under which the court evaluates the governmental
policies underlying the applicable laws and determines which jurisdiction’s policy would be
most advanced by having its laws applied to the facts in the case.” Id. at 234-35 (citation
omitted). “For a tort claim, the state whose policy would be advanced the most is the state with
the most significant relationship to the case.” Id. at 235. “The Court considers the place where
the injury occurred, the place where the conduct causing the injury occurred, the residence,
domicile, place of incorporation or place of business of the parties, and the place where the
parties’ relationship, if any, is centered.” Id. Here, all of these factors support application of
California law, and the parties do not argue that any other law should apply.
22
taken in reliance on these statements and the resulting damage from this reliance. Accordingly,
the Court concludes that Plaintiffs have not met their burden of establishing a claim of fraud.
iii. Enforcement of Consent Judgment
Plaintiffs next assert that Defendants Citibank and Nationstar are in violation of the
Consent Judgment entered into by Citibank and several other banks in United States v. Bank of
America Corp., et al., No. 12-0361 (D.D.C. Apr. 4, 2012), ECF No. 14 (Consent Judgment).
Citibank and Nationstar have moved to dismiss this claim, arguing that because Plaintiffs were
not a party to this Consent Judgment, they are unable to enforce any obligation imposed upon the
parties to the judgment. The Court agrees, as by its terms, this Consent Judgment is not
enforceable by individual third-party beneficiaries. The Consent Judgment specifically states
that enforcement actions may be brought by a “Party to this Consent Judgment or the Monitoring
Committee.” Id. Plaintiffs, as individual mortgagees, are neither party to the Consent Judgment
nor members of the monitoring committee. Other courts in this district considering identical
claims from other individual homeowner plaintiffs have reached the same conclusion. See, e.g.,
Conant v. Wells Fargo Bank, N.A., et al., --- F. Supp. 2d ---, 2014 WL 575758, at *9 (D.D.C.
Feb. 14, 2014) (“by its terms, this Consent Judgment is not enforceable by individual third-party
beneficiaries”); McCain v. Bank of America, No. 13-cv-1418, 2014 WL 334196, at *7 (D.D.C.
Jan. 30, 2014) (“The plaintiff was not a party to this consent judgment, and therefore, is unable
to enforce any obligation imposed upon the parties to the judgment.”); Glaviano v. J.P. Morgan
Chase Bank, N.A., No. 13-cv-2049, 2013 WL 6823122, at *1 n. 1 (D.D.C. Dec. 27, 2013)
(“Plaintiffs also erroneously claim that the foreclosure sale of their property is prohibited by the
Consent Orders issued in United States v. Bank of America . . . . Plaintiffs were not parties in
United States v. Bank of America, which dealt with mortgage servicing, origination, and
23
certification in general and did not involve Plaintiffs’ mortgage or any other particular
mortgage.”); Ghaffari v. Wells Fargo Bank, N.A., No. 13-115, 2013 WL 6070364, at *4 (D.D.C.
Nov. 19, 2013) (“claims by individual borrowers, such as Plaintiff, are excluded from the
Consent Judgment”); see also SEC v. Prudential Sec. Inc., 136 F.3d 153, 158 (D.C. Cir. 1998)
(“this circuit has opted for a bright line rule . . . that third parties to government consent decrees
cannot enforce those decrees absent an explicit stipulation by the government to that effect.”)
(internal citation omitted). Accordingly, all of Plaintiffs’ claims against Citibank and Nationstar
relating to violation of the Consent Judgment in United States v. Bank of America Corp., et al.,
No. 12-0361 (D.D.C. Apr. 4, 2012) are dismissed.
iv. Intentional Infliction of Emotional Distress
Plaintiffs’ claim for intentional infliction of emotional distress (“IIED”) similarly fails.
Plaintiffs allege that “Defendants intentionally inflicted emotional distress knowing that they and
their client and co-conspirator does not have standing to foreclose on said property and knowing
the loss of a persons [sic] home is one of the most traumatic things that anyone can experience.”
Am. Compl. ¶ 90. Plaintiffs make no other allegation in support of their IIED claim. As with
Plaintiffs’ fraud claim, the Court applies California law. See Lopez, 741 F.Supp.2d at 235 (“The
Court considers the place where the injury occurred, the place where the conduct causing the
injury occurred, the residence, domicile, place of incorporation or place of business of the
parties, and the place where the parties’ relationship, if any, is centered.”). “The elements of the
tort of intentional infliction of emotional distress are: ‘(1) outrageous conduct by the defendant;
(2) the defendant’s intention of causing or reckless disregard of the probability of causing
emotional distress; (3) the plaintiff’s suffering severe or extreme emotional distress; and (4)
actual and proximate causation of the emotional distress by the defendant’s outrageous
24
conduct.’” Odinma v. Aurora Loan Svcs., No. C-09-4674, 2010 WL 1199886, at *9 (N.D. Cal.
Mar. 23, 2010) (quoting Trerice v. Blue Cross of Cal., 257 Cal. Rptr. 338, 340 (Cal. Ct. App.
1989)). “Outrageous conduct must ‘be so extreme as to exceed all bounds of that usually
tolerated in a civilized society.’” Id. (quoting Trerice, 257 Cal. Rptr. at 340).
California courts have uniformly rejected IIED claims related to foreclosure actions,
including allegedly wrongful foreclosure. See, e.g., Baidoobonso-Iam v. Bank of America, No.
CV 10-9171, 2011 WL 5870065, at *5 (C.D. Cal. Nov. 22, 2011) (“to the extent that Collier’s
claim is solely predicated on the foreclosure of his property, California courts have held that such
conduct does not state a claim for intentional infliction of emotional distress.”); Smith v.
Wachovia, No. C 09-01300, 2009 WL 1948829, at *4 (N.D. Cal. July 6, 2009) (allegations that
defendant “wrongfully and intentionally initiated non-judicial foreclosure proceedings” were
“not so extreme as to exceed the bounds of civilized society”); Davenport v. Litton Loan
Servicing, LP, 725 F.Supp.2d 862, 884 (N.D. Cal. 2010) (holding that the act of foreclosing on a
home “falls shy of ‘outrageous,’ however wrenching the effects on the borrower.”). Plaintiffs
provide no response to Defendants’ arguments on this point and therefore their IIED claim is
dismissed.
v. Due Process Violation
Finally, under the heading “Additional Relief Requested,” Plaintiffs allege that the
foreclosure sale violated their due process rights under the Fifth and Fourteenth Amendments to
the U.S. Constitution. Am. Compl. ¶ 144. Plaintiffs fail to state a claim for relief under the Due
Process clause because “[i]n order to trigger the Due Process Clause of the Fourteenth
Amendment, or a comparable federal action to invoke the Fifth Amendment, there must be a
‘state action.’ ” Simms v. District of Columbia, 699 F.Supp.2d 217, 224 (D.D.C. 2010). The Due
25
Process Clause “offers no shield” against “private conduct, however discriminatory or
wrongful.” Jackson v. Metropolitan Edison Co., 419 U.S. 345, 349 (1974) (internal quotation
marks omitted). Here, Defendants Citibank and Nationstar are not government actors and their
efforts to foreclose on Plaintiffs’ property, even if accomplished through interactions with the
Mendocino County Sheriff’s Department, do not constitute state action. See United States v.
Property Identified as Lot Numbered 718, 983 F.Supp. 9, 11 (D.D.C. 1997) (“While [plaintiff]
may face eviction if her lender forecloses on the residence, that ‘seizure’ by a strictly private
actor does not trigger the due process clause.”). In light of the lack of state action here,
Plaintiffs’ claim that Defendants violated their due process rights is dismissed.
c. DOE Defendants
Plaintiffs name five Doe Defendants in their Amended Complaint and explain in the
Amended Complaint that “[t]he identity of the DOE defendants are not known to the Plaintiff at
this time but the Plaintiff will add their names in an amended complaint as needed, and as their
names become known to the Plaintiff.” Am. Compl. ¶ 58. Plaintiffs do not give any explanation
about the role the Doe Defendants played in the facts underlying this case. Nor have Plaintiffs
sought to amend their complaint to name the Doe Defendants. When Plaintiffs amended their
Complaint on October 14, 2014, they did not add the names of the Doe Defendants. More
importantly, they did not provide any explanation of the roles and relevance of the Doe
Defendants at that time. The time for serving defendants has now passed. Even if Plaintiffs
cannot know the names of the Doe Defendants without discovery, they should at least be able to
indicate in their Complaint what roles these defendants played in the foreclosure and eviction
proceedings. As Plaintiffs have not indicated that the Doe Defendants played roles in the
foreclosure and eviction proceedings that are any different from the roles played by the named
26
Defendants Plaintiffs have sued, the Court’s analysis of the legal infirmities of Plaintiffs’ claims
in Part B applies with equal force to the Doe Defendants whom, accordingly, must also be
dismissed.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiffs’ Motion to Amend the
Complaint and GRANTS the motions to dismiss of Defendants Citibank, Nationstar, the Law
Enforcement Defendants, and the Law Firm Defendants. Specifically, the Law Enforcement and
Law Firm Defendants are DISMISSED WITHOUT PREJUDICE for lack of personal
jurisdiction. Defendants Citibank and Nationstar and the Doe Defendants are DISMISSED
WITH PREJUDICE as Plaintiffs have failed to state a claim against these Defendants under the
False Claims Act or a claim for wrongful foreclosure, fraud, violation of the consent judgment,
intentional infliction of emotional distress, or violation of due process. In light of this decision
on Defendants’ Motions to Dismiss, Plaintiffs’ Motion for Preliminary Injunction and
Temporary Restraining Order is DENIED AS MOOT. An appropriate Order accompanies this
Memorandum Opinion.
____/s/________________________
COLLEEN KOLLAR-KOTELLY
United States District Judge
27