Clementson v. Countrywide Financial Corp.

FILED
United States Court of Appeals
Tenth Circuit
February 7, 2012
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
FOR THE TENTH CIRCUIT
DANY L. CLEMENTSON,
Plaintiff-Appellant,
v. No. 11-1272
(D.C. No. 1:10-CV-01956-WYD-KMT)
COUNTRYWIDE FINANCIAL (D. Colo.)
CORPORATION, a Delaware
corporation; COUNTRYWIDE
HOME LOANS, INC., a New York
corporation; ANGELO MOZILO, an
individual; DAVID SAMBOL, an
individual; BANK OF AMERICA
CORPORATION, a Delaware
corporation, as successor in interest
to Countrywide Financial
Corporation; and others as DOES
1-25, inclusive,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before KELLY, MURPHY, and HOLMES, Circuit Judges.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Dany L. Clementson, proceeding pro se here as in the district court, appeals
the district court’s judgment dismissing his claims. One corporate defendant,
Bank of America Corporation (“BAC”), waived service of process; the others
were not served. Mr. Clementson voluntarily dismissed the individual
defendants. The district court entered judgment in favor of BAC. We affirm.
BACKGROUND
Mr. Clementson’s claims are based on a refinancing of his home mortgage
loan in October 2003 and subsequent events. He consolidated his existing
mortgages and obtained a new mortgage from defendants Countrywide Financial
Corp. and Countrywide Home Loans, Inc. (collectively, “Countrywide”). He fell
behind in his mortgage payments and a foreclosure was scheduled for February 1,
2007. Countrywide agreed to a delay, during which Mr. Clementson filed for
Chapter 7 bankruptcy protection on March 14, 2007. In October 2009,
Mr. Clementson requested a loan modification, which Countrywide rejected. The
bankruptcy case was closed on November 20, 2009.
Mr. Clementson filed suit in Colorado state court in July 2010. BAC,
who had acquired the Countrywide entities in July 2008, accepted service of
process and removed the case to federal court, invoking diversity jurisdiction.
See 28 U.S.C. § 1332(a). In his complaint, Mr. Clementson asserted seven causes
of action: (1) violation of the Colorado Consumer Protection Act (“CPPA”),
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Colo. Rev. Stat. §§ 6-1-101 to 6-1-115; (2) fraud resulting in theft; (3) conspiracy
to commit fraud resulting in theft; (4) tortious acts resulting in personal injuries;
(5) breach of contract; (6) breach of the implied covenant of good faith and fair
dealing; and (7) violation of the Colorado Organized Crime and Control Act
(“COCCA”), Colo. Rev. Stat. §§ 18-17-101 to 18-17-109.
A magistrate judge recommended dismissal of all claims except his claim
requesting injunctive relief. The district court adopted the recommendation,
issued a show cause order concerning the injunctive-relief issue, dismissed the
injunctive-relief issue, and entered judgment in favor of BAC. Mr. Clementson
appeals.
ANALYSIS
A. Appellate Jurisdiction
Although BAC has not challenged our jurisdiction over this appeal, we
have an independent duty to examine it. See Amazon, Inc. v. Dirt Camp, Inc.,
273 F.3d 1271, 1274 (10th Cir. 2001). We first consider whether
Mr. Clementson’s notice of appeal was taken from a final decision because
generally “only final decisions of the district court are appealable.” Id. at 1275
(citing 28 U.S.C. § 1291). A final decision is one that “end[s] the litigation on
the merits” and “leaves nothing for the court to do but execute the judgment.”
Harbert v. Healthcare Servs. Group., Inc., 391 F.3d 1140, 1145 (10th Cir. 2004)
(internal quotation marks omitted) (alteration omitted).
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Mr. Clementson filed a notice of appeal from the district court’s May 18,
2011, order adopting the magistrate judge’s recommendation, before the court had
ruled on his claim for injunctive relief. He did not file a supplemental notice of
appeal after the court entered a final judgment on all claims. Therefore,
Mr. Clementson’s notice of appeal was premature. Even so, we conclude that
Rule 4(a)(2) of the Federal Rules of Appellate Procedure operates to ripen the
premature notice. Rule 4(a)(2) provides that “[a] notice of appeal filed after the
court announces a decision or order—but before the entry of the judgment or
order—is treated as filed on the date of and after the entry.” “A premature notice
of appeal may ripen . . . upon entry of a subsequent final order, so long as the
order leading to the premature notice of appeal has some indicia of finality and is
likely to remain unchanged during subsequent court proceedings.” Fields v.
Okla. State Penitentiary, 511 F.3d 1109, 1111 (10th Cir. 2007) (citations omitted)
(relying on FirsTier Mortgage Co. v. Investors Mortgage Ins. Co., 498 U.S. 269,
277(1991)). We conclude that the district court’s order adopting the magistrate
judge’s recommendation has sufficient indicia of finality to trigger the savings
provision of Rule 4(a)(2). It disposed of most of Mr. Clementson’s claims and
was unlikely to be changed.
Our determination that the notice of appeal ripened to confer appellate
jurisdiction over the May 18, 2011, order does not, however, apply to the July 18,
2011, order dismissing the claim for injunctive relief. While the filing of a final
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order serves to ripen a premature notice of appeal, it “does not automatically
effectuate the appeal of every judgment or order entered in the entire case.”
Nolan v. U.S. Dep’t of Justice, 973 F.2d 843, 846 (10th Cir. 1992). Rather, the
notice confers jurisdiction over only those orders in existence at the time it was
filed. See id. Therefore, this court lacks jurisdiction over Mr. Clementson’s
appeal from the order dismissing his claim for injunctive relief.
B. Mr. Clementson’s Pro Se Status
Mr. Clementson includes in several of his appellate arguments a claim that
because he was a pro se litigant the district court should have identified and
explained deficiencies in his filings and invited him to correct them. A pro se
litigant’s pleadings are entitled to a liberal construction. Erickson v. Pardus,
551 U.S. 89, 94 (2007) (per curiam). The court, however, does not act as a
litigant’s advocate. Jordan v. Sosa, 654 F.3d 1012, 1018 n.8 (10th Cir. 2011).
Therefore, the district court acted correctly by not advising Mr. Clementson how
to prosecute his claims.
In a related argument, Mr. Clementson asserts that the district court should
have invited him to amend his complaint to correct any deficiencies. Although he
attempted to file an amended complaint in federal court, as the magistrate judge
explained, he was required to obtain the defendant’s consent or to seek leave of
court to file an amended complaint. R. at 256-57. He concedes that he did not do
so. We find no abuse of discretion in the district court’s lack of an invitation to
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file an amended complaint and or its denial of his attempt to file one. Cf. Hall v.
Witteman, 584 F.3d 859, 868 (10th Cir. 2009) (finding no abuse of discretion in
refusing to allow amended complaint where plaintiff did not explain how
amendment would cure deficiencies in his complaint).
Mr. Clementson also contends that the district court should have held an
evidentiary hearing on his claims. “We review the district court’s denial of an
evidentiary hearing for abuse of discretion.” Johnson v. Gibson, 169 F.3d 1239,
1253 (10th Cir. 1999). Where the facts are undisputed “and the issues can be
resolved on the basis of the record and the law, no evidentiary hearing is
required.” Id. (internal quotation marks omitted). Mr. Clementson does not
identify any disputed material facts and our independent review confirms that the
record was sufficient to resolve his claims. Therefore, the district court did not
abuse its discretion in declining to hold a hearing.
C. Designation of Proper Defendants
Mr. Clementson asserts that the district court should have resolved,
sua sponte, which of the three corporate defendants were properly before the
court. He failed to preserve this issue in the district court. Although on appeal he
has indicated that he objected to the magistrate judge’s recommendation on this
issue, the magistrate judge did not address it. His objection was to the dismissal
of BAC on the ground that BAC’s “involvement . . . began no earlier than July of
2008 [so was not] substantially rooted in Plaintiff’s pre-bankruptcy [past].”
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R. at 323. Mr. Clementson’s failure to raise this argument in the district court
precludes our review of it. See Ark Initiative v. U.S. Forest Serv., 660 F.3d 1256,
1261 (10th Cir. 2011) (“If the claims are not preserved in the district court, they
are forfeited and may not be appealed.”); Casanova v. Ulibarri, 595 F.3d 1120,
1123 (10th Cir. 2010) (holding failure to timely object to magistrate judge’s
recommendation waives appellate review of factual and legal questions).
Nevertheless, BAC, who indisputably acquired the Countrywide entities in July
2008, waived service of process and participated in the litigation.
D. Standing to Prosecute Claims
Next, Mr. Clementson challenges the district court’s determination that he
lacked standing to prosecute his causes of action because he failed to list them in
his 2007 Chapter 7 bankruptcy petition. The issue of a party’s standing is a legal
question we review de novo. Bixler v. Foster, 596 F.3d 751, 756 (10th Cir.
2010).
The district court held that Mr. Clementson’s claims were property of the
bankruptcy estate because they accrued before he filed for bankruptcy. They
were not listed in the bankruptcy case, so they remained the property of the
bankruptcy estate. See 11 U.S.C. §§ 541(a)(1), 554(d). Rule 17(a)(1) of the
Federal Rules of Civil Procedure requires an action to “be prosecuted in the name
of the real party in interest.” Consequently, because the claims belonged to the
bankruptcy estate, Mr. Clementson lacked standing to bring them.
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Mr. Clementson asserts that his “unintentional omission, inadvertency or
mistake” excused him from the requirement to list all claims in his bankruptcy
petition. Aplt. Br. at 7. He argues that because his omission was unintentional,
the district court improperly applied the doctrine of judicial estoppel to bar his
claims. See Eastman v. Union Pac. R.R. Co., 493 F.3d 1151, 1156 (10th Cir.
2007) (stating doctrine of judicial estoppel “prohibit[s] parties from deliberately
changing positions according to the exigencies of the moment” in order to
“protect the integrity of the judicial process” (internal quotation marks omitted)).
The district court did not apply the doctrine; rather, it applied Eastman’s
requirement that a bankruptcy debtor disclose all of his claims and causes of
action, whether pending or potential. See id. at 1159. Moreover, a debtor’s
ignorance or mistake, even if insufficiently egregious to warrant application of
judicial estoppel, does not excuse a debtor from listing all potential causes of
action in a bankruptcy petition. Id. 1
Mr. Clementson also asserts that his cause of action based on his October
2009 renewed request to modify his mortgage loan was improperly included in the
claims deemed property of the bankruptcy estate. He maintains that this claim
1
Mr. Clementson contends that the bankruptcy judge and/or trustee should
have raised during the bankruptcy proceedings the causes of action he now
pursues. Aplt. Br. at 12. He argues that their failure to do so indicates that the
causes of action were not viable at that time. The bankruptcy judge and trustee
had no duty to evaluate or prosecute Mr. Clementson’s claims or act as his
advocate. See, e.g., Jordan, 654 F.3d at 1018 n.8.
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was not part of his bankruptcy estate because it arose in October 2009, after he
filed his bankruptcy petition and after BAC acquired the Countrywide entities.
The October 2009 request to modify his mortgage loan was part of
Mr. Clementson’s ongoing campaign to keep his home from foreclosure and to
arrange a suitable mortgage loan. We determine that this cause of action “is
sufficiently rooted in the pre-bankruptcy past and so little entangled with the
bankrupt[’s] ability to make an unencumbered fresh start” that it was properly
considered part of the bankruptcy estate. Segal v. Rochelle, 382 U.S. 375, 380
(1966); see also Parks v. Dittmar (In re Dittmar), 618 F.3d 1199, 1209-10
(10th Cir. 2010) (holding “contingent pre-petition property rights” were
“sufficiently rooted in the pre-bankruptcy past [to be] part of the bankruptcy
estate under [11 U.S.C.] § 541”). Accordingly, we conclude that the district court
properly held that Mr. Clementson’s failure to list his causes of action in his
bankruptcy petition divested him of standing to pursue them in the underlying
litigation.
E. Statutes of Limitation
In an alternative ruling, the district court held that whether the subject
causes of action belonged to the bankruptcy estate or to Mr. Clementson, all
claims, except for the COCCA claim, were barred by the applicable Colorado
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statutes of limitation. 2 Mr. Clementson does not challenge this holding, based on
an accrual date of November 2006, when Mr. Clementson admits he was aware of
defendants’ improper or illegal actions, or March 14, 2007, when he was forced to
file for bankruptcy to prevent foreclosure. Instead, he contends that his court
action was timely because on February 16, 2010, he filed a state-court motion for
a temporary restraining order. 3 He also contends that the limitations periods did
not start until October 2009, the date he attempted to renegotiate his loan. He
further contends that the statutes of limitations were subject to waiver, estoppel,
and equitable tolling. 4 “We review de novo the dismissal of an action under Rule
12(b)(6) based on the statute of limitations.” Braxton v. Zavaras, 614 F.3d 1156,
1159 (10th Cir. 2010).
2
Except for his COCCA claim for which a five-year statute of limitations
applied, see Colo. Rev. Stat. § 13-80-103.8(1)(d), (2), Mr. Clementson’s
claims were subject to two- or three-year statutes of limitation, see id.§§ 13-80-101(1)(a), (c) & 13-80-102(1)(a). Moreover, Mr. Clementson’s claims
were time-barred even though they were subject to the bankruptcy trustee’s
control and the slightly modified limitations rules of the bankrptcy code. See
11 U.S.C. § 108(a).
3
Mr. Clementson’s state-court motion for a temporary restraining order
appears in the record as an attachment to BAC’s notice removing the case to
federal court. According to the notice of removal, the state court took no action
on the motion and closed it administratively.
4
Mr. Clementson has abandoned his argument that the filing of his
bankruptcy petition tolled the statutes of limitation.
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Mr. Clementson argues for the first time on appeal that his February 2010
state-court motion for a temporary restraining order, not July 2010, the date he
filed his state-court complaint, is the operative date for tolling the limitations
periods. He has not identified where in the record he raised this argument to the
district court, either in his opposition to dismissal or in his objection to the
magistrate judge’s recommendation, as required by 10th Cir. R. 28.2(C)(2) (“For
each issue raised on appeal, all briefs must cite the precise reference in the record
where the issue was raised and ruled on.”). See Yang v. Archuleta, 525 F.3d 925,
927 n.1 (10th Cir. 2008) (“Pro se status does not excuse the obligation of any
litigant to comply with the fundamental requirements of the Federal Rules of
Civil and Appellate Procedure.” (internal quotation marks omitted)). We have
independently reviewed the record and have found no reference to this argument.
See R. at 183-86; 324-27. Mr. Clementson has not preserved this issue for
review; it is forfeited. See Ark Initiative, 660 F.3d at 1261; Casanova, 595 F.3d
at 1123. 5 We note that the motion for a temporary restraining order did not set
out any causes of action, but asserted in conclusory fashion that the defendants
engaged in deceptive trade practices. R. at 56, 58.
5
For the same reason, we do not address Mr. Clementson’s suggestion that
he or the district court should have raised “the question of ‘personal injury’
claims, claims in tort in general, and when if ever they would become the
property of the estate in a Bankruptcy case.” Aplt. Br. at 23.
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Mr. Clementson next asserts that the limitations period did not begin to run
until the October 2009 rejection of his request to modify his mortgage loan. He
asserts that he did not discover some facts until after BAC acquired the
Countrywide entities in July 2008. But he stated that as of November 2006, he
was aware that defendants had engaged in improper or illegal activity. And he
concedes that a cause of action accrues when the plaintiff has “knowledge of facts
essential to the cause of action.” Aplt. Br. at 8 (internal quotation marks
omitted).
Mr. Clementson also maintains that he was entitled to the benefit of the
equitable doctrines of waiver, estoppel, and equitable tolling. “We review the
district court’s refusal to apply equitable [remedies] for an abuse of discretion.”
Braxton, 614 F.3d at 1159 (internal quotation marks omitted). Mr. Clementson
has identified no facts to support his claim for equitable relief from the statutes of
limitation. Because he has not demonstrated that “the defendant has wrongfully
impeded [his] ability to bring the claim[s] or truly extraordinary circumstances
prevented [him] from filing his . . . claim[s] despite diligent efforts,” he is not
entitled to equitable relief. Id. at 1161 (internal quotation marks omitted)
(addressing equitable tolling). The district court correctly dismissed all of
Mr. Clementson’s claims, except the COCCA claim, as time-barred. As we
discuss next, the COCCA claim was properly dismissed for failure to state a
claim.
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F. COCCA Claim
The district court determined that Mr. Clementson’s complaint failed to
state a claim under the COCCA because it did not allege the requisite two acts of
racketeering activity. See Colo. Rev. Stat. §§ 18-17-103 (defining “[p]attern of
racketeering activity” as “engaging in at least two acts of racketeering activity
which are related to the conduct of the enterprise”); 18-17-104 (making unlawful
“a pattern of racketeering activity”). We review this holding de novo. ClearOne
Commc’ns, Inc. v. Biamp Sys., 653 F.3d 1163, 1171 (10th Cir. 2011) (“Generally
speaking, we review de novo a district court’s ruling on a motion to dismiss a
complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a
claim.”). “To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (quoting
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Mr. Clementson’s appellate brief refers to his complaint wherein, as the
magistrate judge noted, he alleged only one possible act of racketeering activity.
He has not attempted to demonstrate error in the magistrate judge’s conclusion,
except to cite New Crawford Valley, Ltd. v. Benedict, 877 P.2d 1363(Colo. App. 1993). New Crawford does not help Mr. Clementson because it states
that a claim under the COCCA requires proof of “‘at least two acts of
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racketeering activity which are related to the conduct of the enterprise.’”
Id. at 1371 (quoting Colo. Rev. Stat. § 18-17-103(3)). Mr. Clementson’s failure
to allege two acts of racketeering activity is fatal to his COCCA claim.
CONCLUSION
The judgment of the district court is AFFIRMED.
Entered for the Court
Michael R. Murphy
Circuit Judge
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