Debra Heverly Campbell, & Pohaku Funding & Inv. Corp. v. M&T Bank, Colony Surf Ltd.

• Decision Date: 12 January 2018
• Docket Number: Case No. 3:16-cv-118
• Parties: DEBRA HEVERLY CAMPBELL, and POHAKU FUNDING AND INVESTMENT CORPORATION, it its capacity as Trustee, for the 2895-201 KALAKAUA LAND TRUST and POHAIKEALOHA TRUST, DEBRA HEVERLY CAMPBELL as president of POHAKU FUNDING AND INVESTMENT CORPORATION, and DEBRA HEVERLY CAMPBELL AND JADE MAKANA HEVERLEY-CAMPBELL as beneficiaries of POHAIKEALOHA TRUST, Plaintiffs, v. M&T BANK, COLONY SURF LTD., DAVID SPRIEGEL, GERALYN BONILLA, PERI SARAC-FLIHAN, WILLIAM E. DENISON, R. STEVENS GILLEY, TERRY MULLIN, AND MURIEL PAYNE, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

DEBRA HEVERLY CAMPBELL,
and POHAKU FUNDING AND INVESTMENT CORPORATION, it its capacity as Trustee,
for the 2895-201 KALAKAUA LAND TRUST and POHAIKEALOHA TRUST,
DEBRA HEVERLY CAMPBELL as president of POHAKU FUNDING AND INVESTMENT CORPORATION,
and DEBRA HEVERLY CAMPBELL AND JADE MAKANA HEVERLEY-CAMPBELL
as beneficiaries of POHAIKEALOHA TRUST, Plaintiffs,
v.
M&T BANK, COLONY SURF LTD., DAVID SPRIEGEL, GERALYN BONILLA,
PERI SARAC-FLIHAN, WILLIAM E. DENISON, R. STEVENS GILLEY,
TERRY MULLIN, AND MURIEL PAYNE, Defendants.

Case No. 3:16-cv-118

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

January 12, 2018

JUDGE KIM R. GIBSON

MEMORANDUM OPINION¹

I. Introduction

Pending before this Court are four separate motions (see ECF Nos. 9, 14, 16, 30), filed by four different groups of Defendants, all asking this Court to dismiss Plaintiff's First Amended Complaint (ECF No. 8) in its entirety. These motions have been fully briefed (see ECF Nos. 9, 11, 15, 17, 19, 20, 29, 31) and are ripe for disposition.

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This case arises from Plaintiff Debra Heverly Campbell's ("Plaintiff" or "Campbell") contention that the various Defendants colluded to divest her of a property she had been subleasing at the Colony Surf Apartments in Honolulu, Hawaii through a "complex conspiracy" of illegal and fraudulent racketeering activities. (ECF No. 8 ¶ 21.) Campbell has represented herself throughout this case.²

This Court dismissed all fifteen counts of Campbell's original Complaint—all of which were made against only M&T Bank, but granted Campbell leave to amend her claim of a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"). See Campbell v. M&T Bank, Case No. 3:16-cv-118, 2017 WL 1091939 (W.D. Pa. Mar. 22, 2017) (Gibson, J.). In her three-count Amended Complaint, Campbell added eight additional Defendants. (See ECF No. 8.) All but one

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of those Defendants have moved—in four separate motions—to dismiss the Amended Complaint pursuant to slightly varying combinations of Federal Rules of Civil Procedure 12(b)(2), 12(b)(3), 12(b)(5), and 12(b)(6). The final Defendant, Muriel Payne, did not respond to the Amended Complaint, and the Clerk entered default against her on October 19, 2017. (ECF No. 33.)

For the reasons that follow, this Court will GRANT all four motions. (ECF Nos. 9, 14, 16, 30.) Moreover, the Court will set aside the Clerk's entry of default against Defendant Muriel Payne and dismiss all claims against her.

II. Procedural History

On August 10, 2015, Campbell—representing herself—filed a Praceipe for Writ of Summons in the Blair County Court of Common Pleas; Campbell never filed a Complaint in this first case. (ECF No. 1.) On April 11, 2016, Campbell filed a second case in the Blair County Court of Common Pleas with a Complaint naming only M&T Bank as a defendant. (Id.) These two state cases were consolidated. (Id.) M&T Bank then removed the consolidated case to this Court on May 26, 2016 (see id.) and, shortly thereafter, filed its first Motion to Dismiss and accompanying brief on June 2, 2016. (ECF Nos. 3, 4.)

On March 22, 2017, this Court issued a Memorandum Order and Opinion dismissing all fifteen counts³ of Campbell's first Complaint for lack of a private cause of action, passage of the

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period provided for by the relevant statutes of limitations, and failure to state a claim upon which relief can be granted. See generally Campbell, 2017 WL 1091939. Thirteen of the counts of the Complaint were dismissed with prejudice because it would futile to amend those claims. Id. at *12. However, one claim for an alleged violation of the False Claims Act, 31 U.S.C. § 3731(b) (Count Four) was dismissed without prejudice because, although she could not assert Count Four pro se, Campbell could, perhaps, remedy the defects of that claims with the assistance of counsel.⁴ See Campbell, 2017 WL 1091939, at *11. And, Campbell was granted leave to amend her RICO claim (Count Six) because the allegations of the Complaint were too sparse to determine whether amendment would be futile. Id.

On April 20, 2017, Campbell filed her Amended Complaint. (ECF No. 8.)⁵ The Amended Complaint is organized into three counts: (1) a violation of RICO; (2) financial institution fraud in violation of 18 U.S.C. § 1344; and (3) "interference" by the New York Reserve. (See id.) Campbell brought these three claims against M&T Bank, Colony Surf Ltd. ("Colony Surf"), David Spriegel ("Spriegel"), Geralyn Bonilla ("Bonilla"), Peri Sarac-Flihan ("Sarac-Flihan"), William E. Denison ("Denison"), R. Stevens Gilley ("Gilley), Terry Mullin ("Mullin"), and Muriel Payne ("Payne"). (Id.)

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In response, M&T Bank filed its Motion to Dismiss Plaintiff's First Amended Complaint and accompanying Memorandum of Law on May 4, 2017 (ECF No. 9); Spriegel, Bonilla, and Sarac-Flihan filed their Motion to Dismiss Plaintiff's First Amended Complaint and accompanying Memorandum on June 16, 2017 (ECF Nos. 14, 15); Colony Surf, Denison, and Gilley filed their Motion to Dismiss Plaintiff's First Amended Complaint and accompanying Memorandum on June 20, 2017 (ECF Nos. 16, 17); and, lastly, Mullin filed her Motion to Dismiss Plaintiff's First Amended Complaint and accompanying Memorandum on September 11, 2017 and September 8, 2017 respectively (ECF Nos. 29, 30.)⁶ Campbell filed a response to all four of these motions and briefs. (ECF Nos. 11, 19, 20, 31.)

Most recently, Campbell filed a Request for Entry of Default & Default Judgment against Payne on October 11, 2017 on the basis that Payne had never responded to the Amended Complaint. (ECF No. 32.) The Clerk of Court entered default against Payne on October 19, 2017. (ECF No. 33.)

III. Factual Allegations Set Forth in the Amended Complaint

The following facts, which the Court accepts as true for the purposes of deciding Defendants' motions to dismiss, are alleged in Plaintiff's Amended Complaint or included in the exhibits attached thereto. (See ECF No. 8.)

On April 14, 2000, Pohaku Funding and Investment Corporation, trustee of the 2895-201 Kalakaua Land Trust ("the Trust") obtained a loan from Keystone Financial Bank, N.A. ("Keystone") in the amount of $400,000 ("the Loan"). (Id. ¶ 27; ECF No. 1-2, Ex. A.) M&T Bank

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is the successor of Keystone due to a merger. (ECF No. 8 ¶ 28.) The note accompanying the Loan was executed by Pohaku Funding Investment Corporation as trustee and was guaranteed by Plaintiff. (ECF No. 1-2, Ex. A.) Campbell is a beneficiary of the Trust. (ECF No. 8 ¶ 84.) The Loan's purpose was to finance a sublease on real property located at 2895 Kalakaua Avenue, #201, Honolulu, HI ("the Property") at Colony Surf Apartments, on which M&T Bank held a mortgage. (Id. ¶ 27.)

Although Campbell remained current on the Loan with M&T Bank, she defaulted on her monthly maintenance fees to Colony Surf. (Id. ¶ 55.) Accordingly, Colony Surf issued a default notice for three months of monthly maintenance fees plus legal fees. (Id.) Campbell did not receive notice of this default until shortly before Thanksgiving in November of 2001. (Id. ¶¶ 55-56.)

Colony Surf initiated Hawaii state court proceedings to cancel the sublease for the Property. (Id. ¶ 37; ECF No. 8-11, Ex. 11.) At the cancellation proceeding before the Circuit Court for the First Circuit of Hawaii, the Trust was represented by counsel. (ECF No. 8-1, Ex. 1; ECF No. 8-11, Ex. 11.) On March 27, 2003, the Hawaii state court granted Colony Surf's request and ordered that the Trust's sublease be cancelled. (ECF No. 8-1, Ex. 1.) According to the Hawaii state court's order, the Trust and "all persons claiming an interest in the leasehold property" were forever barred and foreclosed of and from any and all right, title, and interest and claims at law or equity in and to said Property. (Id.) Possession of the Property was awarded to Colony Surf. (Id.)

Following this cancellation of the sublease, Colony Surf transferred ownership of the Property to M&T Bank. (ECF No. 8-11, Ex. 11.) As part of this transfer, M&T Bank and Colony

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Surf agreed to various terms regarding the disposition of potential funds from any subsequent sale of the Property. (Id.) On October 18, 2004, M&T Bank resold the Property to a third party for $615,000 and reimbursed Colony Surf for its costs related to the assessments and action to terminate the sublease. (ECF No. 8-3, Ex. 3.)

Over four months later, on February 24, 2005, Campbell submitted a Freedom of Information Act, 5 U.S.C. § 552 ("FOIA") request to the Federal Reserve. (ECF No. 8-4, Ex. 4.) On March 23, 2005, the Federal Reserve sent a letter to Campbell acknowledging her position that "M&T engaged in deceptive practices by conspiring with [Campbell's] cooperative's management to initiate foreclosure proceedings and to keep the equity gained on the sale of [her] apartment." (Id.) The Federal Reserve also provided Campbell with an itemization of the balance of the Loan at the time of the sale of the Property being $602,796.02. (Id.) Campbell did not receive a copy of the Seller's Closing Statement from the 2004 sale of the Property until August 2012. (ECF No. 8 ¶ 3.)

Over 10 years and 9 months passed between the sale of the Property and Campbell's filing of a Praecipe for Writ of Summons in the Blair County Court of Common Pleas on August 10, 2015. Over 10 years and 4 months passed between Campbell's FOIA request to the Federal Reserve and Federal Reserve's response thereto and Campbell's filing of her Praecipe for Writ of Summons.

IV. Discussion

All Defendants except for Payne have moved to dismiss the entirety of the Amended Complaint under a number of theories. In deciding the four pending motions to dismiss, the Court offers an opinion only as to this Court's lack of personal jurisdiction over eight Defendants

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pursuant to Rule 12(b)(2) and Campbell's failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). Additionally, prior to discussing these two bases for...