Liebman v. Deutsche Bank National Trust Company , 15 F. Supp. 3d 49 ( 2014 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
JAY LIEBMAN, et al.,
Plaintiffs,
v.
Civil Action No. 13-1392 (CKK)
DEUTSCHE BANK NATIONAL TRUST
COMPANY, et al.,
Defendant.
MEMORANDUM OPINION
(February 11, 2014)
Plaintiffs Jay and Andrea Liebman bring this action pro se challenging the judicial
foreclosure of their property as well as the servicing of their mortgage prior to the foreclosure.
Presently before the Court are several motions to dismiss filed by various groups of Defendants
in this case. Upon consideration of the parties’ submissions, 1 the applicable authorities, and the
1
While the Court renders its decision on the record as a whole, its consideration has focused on
the following documents: Pls.’ Am. Compl. (“Am. Compl.”), ECF No. [6]; Defs. Ocwen Loan
Servicing LLC & Deutsche Bank’s Mot. to Dismiss Pls.’ Am. Compl. (“Deutsche Bank MTD”),
ECF No. [17]; Defs. Adam Hartley, Scott Sherman, & Baker Donelson Bearman Caldwell &
Berkowitz’s Mot. to Dismiss Pls.’ Am. Comp. (“Hartley MTD”), ECF No. [18]; Request for
Entry of Default with Aff. in Supp. of Request for Entry of Default J. (“Pls.’ Req. for Entry of
Default”), ECF No. [22]; Def. Deutsche Bank’s Mot. to Strike Aff. of Default Filed by Pls.
Against the Trust or in the Alternative Response to Aff. of Default (“Deutsche Bank Mot. to
Strike”), ECF No. [24]; Def. Judge Marc Schumacher’s Mot. to Dismiss Am. Compl. with
Prejudice (“Schumacher MTD”), ECF No. [25]; Defs.’ William C. Erbey, Ronald M. Farris,
Joseph Ackerman, Hugo Banziger, Anushu Jain, Jurgen Fitschein, Rainer Neske, Herman-Josef
Lamberti, Stefan Krause, Kevin Parker, Pierre De Weck, Clemens Borsig, and Michael Cohrs’
Mot. to Dismiss Pls.’ Am. Compl. (“Erbey MTD”), ECF No. [29]; Pls.’ Response and Mot. to
Deny Mot. to Strike Affidavit of Default Filed by Pls. Against the Trust or in the Alternative
Resonse to Affidavit of Default & Pls.’ Request for Entry of Default by Court (“Pls.’ Opp’n to
Mot. to Strike”), ECF No. [30]; Pls.’ Response and Mot. to Deny the Trust, Ocwen, Adam
Hartley, Scott Sherman, Baker Donelson Motion to Dismiss (“Pls.’ Opp’n to Deutsche Bank &
Hartley MTD”), ECF No. [31]; Defs. Adam Hartley, Scott Sherman, & Baker Donelson
entire record, the Court shall GRANT (1) Defendant Judge Schumacher’s [25] Motion to
Dismiss Amended Complaint with Prejudice, (2) Defendants Ocwen Loan Servicing LLC and
Deutsche Bank’s [17] Motion to Dismiss Plaintiffs’ Amended Complaint, (3) Defendants Adam
Hartley, Scott Sherman, and Baker Donelson Bearman Caldwell & Berkowitz’s [18] Motion to
Dismiss Plaintiffs’ Amended Complaint, and (4) Defendants William C. Erbey, Ronald M.
Farris, Joseph Ackerman, Hugo Banziger, Anushu Jain, Jurgen Fitschein, Rainer Neske,
Herman-Josef Lamberti, Stefan Krause, Kevin Parker, Pierre De Weck, Clemens Borsig, and
Michael Cohrs’ [29] Motion to Dismiss Plaintiffs’ Amended Complaint. The Court shall also
GRANT Defendant Deutsche Bank’s [24] Motion to Strike Affidavit of Default Filed by
Plaintiffs Against the Trust or in the Alternative Response to Affidavit of Default. The
remaining Defendants in this action are dismissed for failure to serve pursuant to this Court’s
January 14, 2014 [34] Order. Because this Court concludes that it lacks subject matter
jurisdiction over claims relating to the propriety of the judicial foreclosure of Plaintiffs’ property
that have already been decided in Florida state court, this case is dismissed with prejudice to the
extent it challenges this judicial foreclosure. To the extent Plaintiffs bring claims that are
independent from a challenge to this judicial foreclosure proceeding, these claims are dismissed
without prejudice for improper venue and failure to serve. Accordingly, this action is hereby
dismissed in its entirety.
I. BACKGROUND
Bearman Caldwell & Berkowitz’s Reply Brief in Supp. of Mot. to Dismiss Pls.’ Am. Compl.
(“Hartley Reply”), ECF No. [36]; Reply Brief in Supp. of Mot. to Strike Aff. of Default Filed by
Pls. Against the Trust or in the Alternative Response to Aff. of Default (“Deutsche Bank Mot. to
Strike Reply”), ECF No. [37]; Defs. Ocwen Loan Servicing LLC & Deutsche Bank’s Reply
Brief in Supp. of the Servicer Defs.’ Mot. to Dismiss Pls.’ Am. Compl. (“Deutsche Bank
Reply”), ECF No. [38]; Pls.’ Response and Mot. to Deny Marc Schumacher’s Mot. to Dismiss
(“Pls.’ Opp’n to Schumacher MTD”), ECF No. [39].
2
Plaintiffs Jay and Andrea Liebman are Florida residents who have brought suit against
Deutsche Bank National Trust Company (“Deutsche Bank”) and a series of individuals and
businesses involved in a foreclosure action against their home. Specifically, Plaintiffs sue
Deutsche Bank, Joseph Ackerman, Hugo Banziger, Anshu Jain, Jurgen Fitschien, Rainer Neske,
Hermann-Josef Lamberti, Stefan Krause, Kevin Parker, Pierre De Weck, Clemens Borsig,
Michael Cohrs, Ocwen Loan Servicing LLC, Reena Ruzario, William C. Erbey, Ronald Farris,
Ashresh Pandey, Judge Marc Schumacher, Adam Hartley, Scott Sherman, an individual named
only as Mr. Baker, an individual named only as Mr. Donelson, an individual named only as Mr.
Bearman, an individual named only as Mr. Caldwell, an individual named only as Mr.
Berkowitz, an individual named only as Mr. Koplowitz, an individual named only as Mr.
Ostrow, five John Doe Defendants (“John Does 1-5”), the Dade County Circuit Court,
Kopelowitz Ostrow P.A., Elizabeth Wellborn, Yasmin Chew-Alexis, Brian Koplowitz, Jeffrey
Ostrow, Baker Donelson Bearman Caldwell & Berkowitz P.C., and Chantel Grant. 2 Am. Compl.
at 1-2. Plaintiffs contend that foreclosure on their home by Deutsche Bank in Florida state court
“is presently pursued under color of law with no standing.” Id. at 3. Specifically, Plaintiffs
allege that Deutsche Bank has no proof that it owns the loan related to their home, and, based on
allegedly abusive billing practices in the past, has improperly asserted that Plaintiffs are in
default on their home loan. Id. at 3-4. Plaintiffs allege a conspiracy led by Deutsche Bank
among all the Defendants, including the state court judge presiding over the foreclosure action in
Florida state court, to improperly foreclose on their home and the homes of others like them.
Plaintiffs request injunctive and declaratory relief “to prevent a great miscarriage of justice”, that
2
Plaintiffs also initially sued, but have subsequently voluntarily dismissed, Defendant Jonathan
Streisfeld. See Order (Jan. 14, 2014), ECF No. [35].
3
is “the threat of foreclosing on [their] home ‘under color of law’ . . . .” Id. at 4, 14. Plaintiffs
also request punitive damages in the amount of ten billion dollars on behalf of themselves and
others like them for Defendants’ overcharging of mortgage-related fees resulting in improper
foreclosures. Id. at 33. In essence, Plaintiffs seek to invoke this Court’s “powers of protection
against unlawful taking and excessive, deceptive charging on our mortgage saving us from a
Fraudulent Foreclosure.” Id. at 26. Invoking 42 U.S.C. § 1983, as well as various other federal
statutes and provisions of the United States Constitution, Plaintiffs assert the following counts,
apparently all of which are asserted against all of the Defendants: (1) Material Breach of
Contract, (2) Duress, (3) Extortion, (4) Conspiracy, (5) Defamation of Character, (6) Theft by
Conversion, (7) Breach of Duty, (8) Deception/Deceit, (9) Fraud, (10) Abuse of Process, (11)
Negligence, (12) Contradictory Statements, (13) Loss of Consortium, (14) Intentional Infliction
of Emotional Distress, (15) Negligent Infliction of Emotional Distress, and (16) False,
Deceptive, Misleading Representation. Id. at 37-44.
Plaintiffs filed suit in this Court on September 5, 2013, and filed their [6] Amended
Complaint on October 31, 2013. At the time Plaintiffs filed this lawsuit, they were involved in
the above-referenced judicial foreclosure action against Deutsche Bank in the Circuit Court of
the 11th Judicial Circuit in and for Miami-Dade County, Florida. Id. at 3-4. This case, Deutsche
Bank National Trust Company as Trustee for the Registered Holders of CDC Mortgage Capital
Trust 2003-HE4 Mortgage Pass-Through Certificates 2003-HE4, et al., v. Liebman, et al., No.
2010-CA-35247, was presided over by Defendant Judge Marc Schumacher. On December 19,
2013, Judge Schumacher issued a Final Judgment of Foreclosure in this case, concluding that the
Liebmans owed Deutsche Bank $212,212.31. This order also set a date for sale of the
4
foreclosed-upon property. 3
II. LEGAL STANDARD
A. Rule 12(b)(1)
A court must dismiss a case pursuant to Rule 12(b)(1) when it lacks subject matter
jurisdiction. In determining whether there is jurisdiction, the Court may “consider the complaint
supplemented by undisputed facts evidenced in the record, or the complaint supplemented by
undisputed facts plus the court’s resolution of disputed facts.” Coalition for Underground
Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003) (citations omitted); see also Jerome
Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253 (D.C. Cir. 2005) (“[T]he
district court may consider materials outside the pleadings in deciding whether to grant a motion
to dismiss for lack of jurisdiction.”). “At the motion to dismiss stage, counseled complaints, as
well as pro se complaints, are to be construed with sufficient liberality to afford all possible
inferences favorable to the pleader on allegations of fact.” Settles v. U.S. Parole Comm’n, 429
F.3d 1098, 1106 (D.C. Cir. 2005). In spite of the favorable inferences that a plaintiff receives on
a motion to dismiss, it remains the plaintiff’s burden to prove subject matter jurisdiction by a
preponderance of the evidence. Am. Farm Bureau v. Envtl. Prot. Agency, 121 F.Supp.2d 84, 90
(D.D.C. 2000). “Although a court must accept as true all factual allegations contained in the
complaint when reviewing a motion to dismiss pursuant to Rule 12(b)(1), [a] plaintiff['s] factual
allegations in the complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion than in
resolving a 12(b)(6) motion for failure to state a claim.” Wright v. Foreign Serv. Grievance Bd.,
503 F.Supp.2d 163, 170 (D.D.C. 2007) (internal citations and quotation marks omitted).
3
Although no party notes the issuance of this Final Judgment of Foreclosure, the Court is
permitted to take judicial notice of this opinion from another court. See Crowder v. Bierman,
Geesing, and Ward LLC, 713 F.Supp.2d 6, 9 n. 6. (D.D.C. 2010).
5
B. Rule 12(b)(3)
When presented with a motion to dismiss for improper venue under Rule 12(b)(3), the
Court “accepts the plaintiff’s well-pled factual allegations regarding venue as true, draws all
reasonable inferences from those allegations in the plaintiff’s favor and resolves any factual
conflicts in the plaintiff’s favor.” James v. Verizon Servs. Corp., 639 F.Supp.2d 9, 11 (D.D.C.
2009). “Because it is the plaintiff’s obligation to institute the action in a permissible forum, the
plaintiff usually bears the burden of establishing that venue is proper.” Freeman v. Fallin, 254
F.Supp.2d 52, 56 (D.D.C. 2003). In order “[t]o prevail on a motion to dismiss for improper
venue, the defendant must present facts that will defeat the plaintiff’s assertion of venue.” Khalil
v. L-3 Commc’ns Titan Grp., 656 F.Supp.2d 134, 135 (D.D.C. 2009) (internal citation omitted).
Unless there are “pertinent factual disputes to resolve, a challenge to venue presents a pure
question of law.” Williams v. GEICO Corp., 792 F.Supp.2d 58, 62 (D.D.C.2011).
C. Rule 12(b)(5)
A court ordinarily may not exercise personal jurisdiction over a party named as a
defendant in the absence of service of process (or waiver of service by the defendant). See
Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999) (citing Omni
Capital Int’l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987) (“Before a . . . court may
exercise personal jurisdiction over a defendant, the procedural requirement of service of
summons must be satisfied.”); Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 444-45
(1946) (“[S]ervice of summons is the procedure by which a court . . . asserts jurisdiction over the
person of the party served.”)). Pursuant to Federal Rule of Civil Procedure 12(b)(5), “if the
plaintiff does not properly effect service on a defendant, then the defendant may move to dismiss
the complaint” without prejudice. Hilska v. Jones, 217 F.R.D. 16, 20 (D.D.C. 2003); see also
6
Simpkins v. District of Columbia, 108 F.3d 366, 369 (D.C. Cir. 1997). “[T]he party on whose
behalf service is made has the burden of establishing its validity when challenged; to do so, he
must demonstrate that the procedure employed satisfied the requirements of the relevant portions
of [Federal Rule of Civil Procedure 4] and any other applicable provision of law.” Light v. Wolf,
816 F.2d 746, 750 (D.C. Cir. 1987) (internal quotation omitted).
III. DISCUSSION
Defendant Judge Marc Schumacher has moved to dismiss Plaintiffs’ Complaint for lack
of subject matter jurisdiction on the ground that Plaintiffs’ complaint is essentially a challenge to
the judgment against Plaintiffs in the pending Florida state court foreclosure action, a claim
barred by the Rooker-Feldman doctrine. See Schumacher MTD at 4-6.
Under the Rooker-Feldman doctrine, which derives its name from two Supreme Court
cases, Rooker v. Fidelity Trust Company, 263 U.S. 413 (1923) and District of Columbia Court of
Appeals v. Feldman, 460 U.S. 462 (1983), “a party losing in state court is barred from seeking
what in substance would be appellate review of the state judgment in a United States district
court, based on the losing party's claim that the state judgment itself violates the loser’s federal
rights.” Johnson v. De Grandy, 512 U.S. 997, 1005-1006 (1994) (citing Feldman, 460 U.S. at
482; Rooker, 263 U.S. at 416). Pursuant to this doctrine, federal district courts do not have the
“authority to review final judgments of a state court in judicial proceedings,” Feldman, 460 U.S.
at 482, or to decide federal constitutional claims that are so “inextricably intertwined with a state
court decision that the district court is in essence being called upon to review the state-court
decision.” Stanton v. Dist. of Columbia Court of Appeals, 127 F.3d 72, 75 (D.C. Cir. 1997)
(quoting Feldman, 460 U.S. at 483-84). The Rooker-Feldman doctrine is based on the
jurisdictional grant codified in 28 U.S.C. § 1257, which authorizes only the Supreme Court to
7
exercise appellate jurisdiction over state court judgments. See 28 U.S.C. § 1257(a). “The
Rooker-Feldman doctrine prevents lower federal courts from hearing cases that amount to the
functional equivalent of an appeal from a state court.” Gray v. Poole, 275 F.3d 1113, 1119 (D.C.
Cir. 2002).
The Court finds that to the extent Plaintiffs are invoking the United States Constitution to
challenge the propriety of their judicial foreclosure, Plaintiffs’ Complaint falls within the ambit
of the Rooker-Feldman doctrine. A decision by this Court as to Plaintiffs’ challenge to their
foreclosure would “amount to the functional equivalent of an appeal from a state court.” Id. As
noted, on December 19, 2013, the Circuit Court of the 11th Judicial Circuit Court in and for
Miami-Dade County, Florida issued a Final Judgment of Foreclosure against Plaintiffs. Having
lost the judicial foreclosure action brought against them in state court, Plaintiffs in this action
raise claims that in essence contest the validity of that judgment. Although Plaintiffs’ suit is not
styled as an appeal from the foreclosure action, having been filed prior to the issuance of the
final judgment of the foreclosure, it does repeatedly contest the propriety of the foreclosure. See,
e.g., Am. Compl. at 3-4, 5, 11, 16, 29-32. Consequently, at this point, with the state court having
issued its decision, a decision by this Court on whether this foreclosure is appropriate would
function as an improper appeal of the state court judgment as to the foreclosure.
In similar cases, other courts of this district have concluded that the Rooker-Feldman
doctrine barred litigation of claims that would challenge the results of state court judicial
foreclosure actions. See, e.g., Glaviano v. J.P. Morgan Chase Bank, N.A., No. 13-cv-2049, 2013
WL 6823122, at *2 (D.D.C. Dec. 27, 2013) (“Under the Rooker-Feldman abstention doctrine,
the Court lacks jurisdiction to hear what amounts to the Plaintiffs’ challenge to decisions of
California state courts.”); Davenport v. Dore, No. 13-cv-1007, 2013 WL 3438482 (D.D.C. July
8
9, 2013) (“[plaintiff] asks this federal district court to review rulings of the Circuit Court of
Maryland for Howard County, a state court. The Court lacks jurisdiction over the Complaint
under Rooker-Feldman and . . . it must be dismissed.”); Hunter v. U.S. Bank Nat. Ass’n, 698
F.Supp.2d 94, 100 (D.D.C. 2010) (“All of the injuries alleged in the Complaint stem from the
foreclosure of the Property, and [plaintiff] is explicitly seeking a judgment from this Court that
would have the effect of modifying the state court’s judgment of foreclosure.”); Tremel v.
Bierman & Geesing, LLC, 251 F.Supp.2d 40, 45-46 (D.D.C. 2003) (“What the plaintiff has done,
in effect, is to seek the equivalent of appellate review by this Court of a state court judgment by
claiming that he has suffered injuries as a direct result of the foreclosure proceedings.”). So too
here, a judgment in Plaintiffs’ favor on issues relating to the judicial foreclosure would operate,
in effect, as a reversal of the concluded state court proceedings. Accordingly, this Court lacks
subject matter jurisdiction to hear any of Plaintiffs’ claims related to the propriety of the
foreclosure of their home. 4 Given that Defendant Judge Marc Shumacher presided over this
judicial foreclosure proceeding and appears to have no other relation to this case, Plaintiffs’
claims against Defendant Schumacher are dismissed for lack of subject matter jurisdiction. 5
However, given the vagueness and scattershot nature of Plaintiffs’ 53-page Amended
4
Although Plaintiffs are barred from seeking an appeal of claims related to their foreclosure in
this Court or another federal district court, they are entitled to appeal the foreclosure in the
Florida state court system. Indeed, it appears Plaintiffs have done so, filing a Notice of Appeal
from Judge Schumacher’s decision on January 17, 2014.
5
Because the Court concludes that it is without subject matter jurisdiction to hear Plaintiffs’
Complaint as to Defendant Judge Marc Schumacher, the Court does not address the various other
grounds for dismissal asserted by Defendant Schumacher. However, the Court notes that even if
subject matter jurisdiction were proper here, any claims against Defendant Schumacher are
barred by the doctrine of judicial immunity, since a judge acting in his or her judicial capacity –
i.e., performing a “function normally performed by a judge” – is immune from suit on all judicial
acts as long as the judge was not acting in the complete absence of jurisdiction. Mireles v. Waco,
502 U.S. 9, 11-12 (1991).
9
Complaint, which includes an additional 85 pages of exhibits, the Court recognizes that the
Rooker-Feldman doctrine may not bar all of Plaintiffs’ claims. Although the gravamen of
Plaintiffs’ Complaint addresses the propriety of the foreclosure action, this Court has an
obligation to construe Plaintiffs’ Complaint liberally, given their pro se status. Taking a broad
view of Plaintiffs’ lengthy pleading, the Court concludes that their Complaint could be read to
raise a challenge that extends beyond the instant foreclosure to include claims not “inextricably
intertwined”, Stanton, 127 F.3d at 75, with the state court judicial foreclosure proceeding.
Plaintiffs appear to challenge actions that preceded their foreclosure, including allegedly inflated
and deceptive billing practices. See Am. Compl. at 27-28. On behalf of themselves and others
similarly situated, they seek an injunction prohibiting these practices going forward as well as
punitive damages for past wrongs. Id. at 32. While these issues may well have been decided in
the Florida state court proceeding, based on the parties’ filings and the materials available on the
public docket of the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County,
Florida the Court cannot conclusively determine the extent to which these issues were addressed
in that action. Nevertheless, even if this Court did have subject matter jurisdiction to consider
these claims – assuming they were not decided in the state court litigation – the remainder of
Plaintiffs’ suit is dismissed without prejudice for improper venue and failure to serve. 6
Defendants Ocwen Loan Servicing LLC, Deutsche Bank National Trust Company, Adam
Hartley, Scott Sherman, and Baker Donelson Bearman Caldwell & Berkowitz have moved to
6
Although the Court relies on procedural considerations to dismiss the portion of Plaintiffs’ suit
not seeking to challenge the judicial foreclosure of their home, the Court notes that to the extent
Plaintiffs’ seek to bring a class action on behalf of similarly situated homeowners, they may not
do so pro se. See DeBrew v. Atwood, 847 F.Supp.2d 95, 105 (D.D.C. 2012) (“Plaintiff may
represent himself as a pro se litigant, but he is not qualified to appear on behalf of another
person.”).
10
dismiss this lawsuit, inter alia, pursuant to Rule 12(b)(3) for improper venue. See Deutsche
Bank MTD at 4-7; Hartley MTD at 9-12. Under 28 U.S.C. § 1391(b), a civil action may be
brought in: (1) a district where a defendant resides, if all defendants are residents of the State in
which the district is located; (2) a district in which a substantial part of the events giving rising to
the claim occurred, or a substantial part of property that is the subject of the action is situated; or
(3) if there is no district where the action may be brought, any district where a defendant is
subject to the court’s personal jurisdiction.
Under the first prong of §1391(b), these Defendants correctly point out that they are not
residents of the District of Columbia for purposes of this case. See Deutsche Bank MTD at 5-7;
Hartley MTD at 10-12. Neither of the individual Defendants challenging venue – Hartley and
Sherman – are residents of the District of Columbia. Hartley MTD at 11. Furthermore, the
Court finds that none of the corporate defendants challenging venue – Ocwen Loan Servicing
LLC, Deutsche Bank National Trust Company, and Baker Donelson Bearman Caldwell &
Berkowitz – are residents of the District of Columbia. Pursuant to 28 U.S.C. § 1391(c)(2), a
corporate defendant is deemed to reside “in any judicial district in which such defendant is
subject to the court's personal jurisdiction with respect to the civil action in question.” To
establish personal jurisdiction over a foreign corporation in the District of Columbia, a court
must first “examine whether jurisdiction is applicable under the state's long-arm statute” before
“determin[ing] whether a finding of jurisdiction satisfies the constitutional requirements of due
process.” GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000).
Plaintiffs do not allege that Ocwen Loan Servicing LLC, Deutsche Bank National Trust
Company, or Baker Donelson Bearman Caldwell & Berkowitz’s actions giving rise to this suit
occurred in the District of Columbia. Accordingly, the only other relevant statutory basis for the
11
exercise of personal jurisdiction over these Defendants is D.C. Code § 13-334(a), which
establishes “general” personal jurisdiction over foreign corporations. Plaintiff, however, may not
invoke § 13-334(a) unless the corporation was served within the District of Columbia. See
Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 514 (D.C. Cir. 2002) (“Where the basis for
obtaining jurisdiction over a foreign corporation is § 13-334(a) . . . a plaintiff who serves the
corporation by mail outside the District is ‘foreclosed from benefitting from [the statute's]
jurisdictional protection.’”) (quoting Everett v. Nissan Motor Corp., 628 A.2d 106, 108
(D.C.1993)). Here, Plaintiffs failed to serve Defendants Ocwen and Deutsche Bank in the
District of Columbia, see ECF No. [28] (return-of-service affidavit stating that Ocwen was
served in Florida), ECF No. [40-1] (return-of-service affidavit stating that Deutsche Bank was
served in New York), and have failed to serve Baker Donelson Bearman Caldwell & Berkowitz
with process. Accordingly, venue is not proper in this district under 28 U.S.C. § 1391(b)(1).
Plaintiffs also fails to establish venue over these Defendants under 28 U.S.C. §
1391(b)(2), under which venue is proper in “a judicial district in which a substantial part of the
events or omissions giving rise to the claim occurred, or a substantial part of property that is the
subject of the action is situated.” Without contradiction from Plaintiffs, the Defendants
challenging venue state that none of the events that form the basis of Plaintiffs’ Complaint
occurred in the District of Columbia. Deutsche Bank MTD at 6; Hartley MTD at 11. Indeed, the
surviving portion of Plaintiffs’ suit arises out of the servicing of a mortgage on a home in
Florida. Plaintiffs make no allegations in their Complaint or in other filings that tie the events
underlying this action to the District of Columbia.
Finally, venue is improper in this district under 28 U.S.C. §1391(b)(3), which states that
“if there is no district in which an action may be brought as provided in this section” venue is
12
proper in “any judicial district in which a defendant is subject to the court's personal jurisdiction
with respect to such action.” Here, venue would be proper pursuant to 28 U.S.C. § 1391(b)(2) in
the Southern District of Florida. Plaintiffs live in that district and they experienced the allegedly
fraudulent and malicious billing procedures there. Accordingly, given that another district exists
where this action may be brought, venue is not appropriate here under the safety net provision of
28 U.S.C. §1391(b)(3).
Plaintiffs do not argue that venue is appropriate in this district, but rather argue that
Defendant Deutsche Bank has waived its right to raise the defense of improper venue as it filed
its responsive pleading more than 21 days after being served with the Amended Complaint in
this action. Pls.’ Opp’n to Deutsche Bank & Hartley MTD at 5-6. The Court finds this argument
unpersuasive. First, Plaintiffs do not address the fact that other Defendants contesting venue
besides Deutsche Bank have shown that venue is clearly improper in this district. Second,
Deutsche Bank states that it was not properly served with the Amended Complaint in this action
pursuant to Fed. R. Civ. P. 4, as the version served upon it differs from the version filed on the
docket. Deutsche Bank MTD at 18-19; Deutsche Bank Mot. to Strike at 2-3, 5. In response,
Plaintiffs simply state that Deutsche Bank has waived its ability to argue improper service by
filing an allegedly late Rule 12(b) motion. Pls.’ Opp’n to Deutsche Bank & Hartley MTD at 10-
11. Plaintiffs do not respond in substance to Deutsche Bank’s argument regarding improper
service or explain why a different version of the Complaint was served on Defendant Deutsche
Bank. See, e.g., Teamsters Local 639 Employees, Health Trust v. Hileman, No. 13-833, 2013
WL 5738022, at *3 (D.D.C. Oct. 23, 2013) (“Although proper service can be waived, actual
notice of a lawsuit is insufficient to constitute waiver and establish personal jurisdiction.”); Rowe
v. District of Columbia, 892 F.Supp.2d 174, 180 (D.D.C. 2012) (noting that service of process is
13
improper “even if a defendant had actual notice.”) (internal citation omitted); Shaw v. District of
Columbia, No. 05-cv-1284, 2006 WL 1371681, at *5 (D.D.C. May 15, 2005) (“It is well-
established that a named defendant’s actual knowledge of a lawsuit is no substitute for proper
service of process under Federal Rule of Civil Procedure 4.”). 7 Indeed, as of the date of this
opinion, Plaintiffs have still failed to serve the official version of the Amended Complaint on
Defendant Deutsche Bank. 8
When venue is improper, the Court must dismiss the suit or, “if it be in the interest of
justice, transfer [it] to any district or division in which it could have been brought.” 28 U.S.C. §
1406(a). The decision to transfer or dismiss is committed to the sound discretion of the district
court. See Noxell Corp. v. Firehouse No. 1 Bar-B-Que Restaurant, 771 F.2d 521, 534 (D.C. Cir.
1985) (describing “whether the court dismisses or transfers” for lack of venue as “a
determination which rests in the broad discretion of the court”). Here, in light of this opinion
dismissing an uncertain portion of Plaintiffs’ Complaint for lack of subject matter jurisdiction,
the Court concludes that dismissal without prejudice with respect to the Defendants challenging
7
The Court notes that Ali v. Mid-Atlantic Settlement Services, 233 F.R.D. 32, 36 (D.D.C. 2006)
states that “[w]here the defendant receives actual notice and the plaintiff makes a good faith
effort to serve the defendant pursuant to the federal rule, service of process has been effective.”
However, that case is distinguishable from the facts here, as it involved a situation where a
defendant claimed he never received service, despite the fact that a proper version of the
summons and complaint were left for the defendant with both his mother and his doorman, as
well as at the door of defendant’s apartment at defendant’s instruction. Id. at 37-38. Here, by
contrast, Defendant Deutsche Bank received a different copy of the complaint than that which
was filed on the docket. Ali does not address the appropriateness of service in this context,
where the wrong papers were served on the defendant.
8
For the same reasons, Defendant’s [24] Motion to Strike Affidavit of Default Filed by Plaintiffs
Against the Trust or in the Alternative Response to Affidavit of Default is granted. When
Defendant Deutsche Bank failed to respond within 21 days of Plaintiffs’ improper service,
Plaintiffs filed an Affidavit for Default. See Pl.’s Req. for Entry of Default. Defendant Deutsche
Bank opposed the entry of default on the grounds that service was improper and default was not
justified. See Deutsche Bank Mot. to Strike. Because the Court agrees that Deutsche Bank was
improperly served, an entry of default against Deutsche Bank would be inappropriate.
14
venue is appropriate. Accordingly, Plaintiffs’ claims against Defendants Ocwen Loan Servicing
LLC, Deutsche Bank National Trust Company, Adam Hartley, Scott Sherman, and Baker
Donelson Bearman Caldwell & Berkowitz distinct from any challenge to the judicial foreclosure
and other issues decided in the state court proceeding are dismissed without prejudice. Any
claims against these Defendants relating to the propriety of the foreclosure are barred by lack of
subject matter jurisdiction in any federal district court. However, any remaining claims against
these Defendants may be brought by Plaintiffs in a federal district court where venue is proper. 9
The remaining Defendants in this action, to the extent Plaintiffs’ claims against them are
not predicated on any issues decided in the state court judicial foreclosure proceeding, are
dismissed without prejudice for failure to serve. These Defendants are Joseph Ackerman, Hugo
Banziger, Anshu Jain, Jurgen Fitschien, Rainer Neske, Hermann Josef-Lamberti, Stefan Krause,
Kevin Parker, Pierre De Weck, Clemens Borsig, Michael Cohrs, Reena Ruzario, Willima C.
Erbey, Ronald Farris, Ashresh Pandey, Mr. Baker, Mr. Donelson, Mr. Bearman, Mr. Caldwell,
Mr. Berkowitz, Mr. Koplowitz, Mr. Ostrow, John Does 1-5, Dade County Circuit Court,
Kopelowitz Ostrow P.A., Elizabeth Wellborn, Yasmin Chew-Alexis, Brian Koplowitz, Jeffrey
Ostrow, and Chantel Grant. See Am. Compl. at 1-2. Pursuant to Rule 4(m), Plaintiffs were
required to serve all Defendants with process within 120 days of the filing of a lawsuit. Fed. R.
Civ. P. 4(m). The Complaint in this action was filed on September 5, 2013, meaning Plaintiffs
should have served all Defendants by January 3, 2014. None of the above-named Defendants, as
well as several Defendants dismissed for other reasons, were served by this date. On January 14,
2014, this Court issued a [34] Order granting Plaintiffs additional time to serve all remaining
9
Because the Court dismisses this action as to these Defendants for improper venue, it does not
reach the remaining grounds for dismissal asserted in these Defendants’ Motions to Dismiss. See
Deutsche Bank MTD at 7-19; Hartley MTD at 5-9, 12-23.
15
unserved Defendants. However, the Court warned Plaintiffs that “[i]n order to avoid the finality
of a mandatory dismissal” as to the unserved Defendants, “by no later than FEBRUARY 3, 2014,
Plaintiffs [needed to] either cause process to be served and proof of service to be filed with the
Court as to these Defendants, or file a status report with the Court explaining why service ha[d]
not been made.” See Order (Jan. 14, 2014), ECF No. [34] at 2. Service was not accomplished
by this date, and Plaintiffs failed to file a status report by this date. 10 Accordingly, pursuant to
Fed. R. Civ. P. 4(m) and this Court’s January 14, 2014 [34] Order, Plaintiffs’ claims against
Defendants Joseph Ackerman, Hugo Banziger, Anshu Jain, Jurgen Fitschien, Rainer Neske,
Hermann Josef-Lamberti, Stefan Krause, Kevin Parker, Pierre De Weck, Clemens Borsig,
Michael Cohrs, Reena Ruzario, Willima C. Erbey, Ronald Farris, Ashresh Pandey, Mr. Baker,
Mr. Donelson, Mr. Bearman, Mr. Caldwell, Mr. Berkowitz, Mr. Koplowitz, Mr. Ostrow, John
Does 1-5, Dade County Circuit Court, Kopelowitz Ostrow P.A., Elizabeth Wellborn, Yasmin
Chew-Alexis, Brian Koplowitz, Jeffrey Ostrow, and Chantel Grant – to the extent they are based
on issues not decided in the state court judicial foreclosure action – are dismissed without
prejudice for failure to serve. 11
IV. CONCLUSION
For the foregoing reasons, this action is DISMISSED in its entirety. The Court GRANTS
10
After this February 3, 2014 deadline, Plaintiffs late-filed a request for an additional extension
of the time to effect service. See Motion for Extension of Time to Respond to Motion to Dismiss
Plaintiffs’ Amended Complaint Including Additional Time to Effect Service as Ordered on Jan.
14, 2014 Due to Extenuating Circumstances Beyond Our Control, ECF No. [41]. The Court
denies this request today by separate Order.
11
Because the Court dismisses this action as to these Defendants for failure to serve, it does not
reach the remaining grounds for dismissal asserted by Defendants William C. Erbey, Ronald M.
Farris, Joseph Ackerman, Hugo Banziger, Anushu Jain, Jurgen Fitschein, Rainer Neske,
Herman-Josef Lamberti, Stefan Krause, Kevin Parker, Pierre De Weck, Clemens Borsig, and
Michael Cohrs. See Erbey MTD at 5-15.
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(1) Defendant Judge Schumacher’s [25] Motion to Dismiss Amended Complaint with Prejudice,
(2) Defendants Ocwen Loan Servicing LLC and Deutsche Bank’s [17] Motion to Dismiss
Plaintiffs’ Amended Complaint, (3) Defendants Adam Hartley, Scott Sherman, and Baker
Donelson Bearman Caldwell & Berkowitz’s [18] Motion to Dismiss Plaintiffs’ Amended
Complaint, and (4) Defendants William C. Erbey, Ronald M. Farris, Joseph Ackerman, Hugo
Banziger, Anushu Jain, Jurgen Fitschein, Rainer Neske, Herman-Josef Lamberti, Stefan Krause,
Kevin Parker, Pierre De Weck, Clemens Borsig, and Michael Cohrs’ [29] Motion to Dismiss
Plaintiffs’ Amended Complaint. The Court also GRANTS Defendant Deutsche Bank’s [24]
Motion to Strike Affidavit of Default Filed by Plaintiffs Against the Trust or in the Alternative
Response to Affidavit of Default. The remaining Defendants in this action are dismissed for
failure to serve pursuant to this Court’s January 14, 2014 [34] Order. Accordingly, Plaintiffs’
claims are DISMISSED WITH PREJUDICE for lack of subject matter jurisdiction to the extent
they seek to challenge the judicial foreclosure of their home or any other issue already decided in
the Florida state court foreclosure action. Plaintiffs’ remaining claims, to the extent they exist,
are DISMISSED WITHOUT PREJUDICE for improper venue and failure to serve. An
appropriate Order accompanies this Memorandum Opinion.
/s/
COLLEEN KOLLAR-KOTELLY
UNITED STATES DISTRICT JUDGE
17