Dixon v. Green Tree Servicing, LLC

• Decision Date: 03 July 2019
• Docket Number: Case No. 19-80022-CIV-MARRA/MATTHEWMAN
• Parties: ROY J. DIXON JR. and BLANCHE L. DIXON, Plaintiffs, v. GREEN TREE SERVICING, LLC n/k/a DITECH FINANCIAL LLC SUCCESSOR BY MERGER, COUNTRYWIDE FINANCIAL CORPORATION, COUNTRYWIDE BANK, COUNTRYWIDE HOME LOANS, INC., COUNTRY WIDE HOME LOANS SERVICING LP, BAC HOME LOANS SERVICING LP, n/k/a BANK OF AMERICA, NA SUCCESSOR BY MERGER, FANNIE MAE, Defendants.
• Court: U.S. District Court — Southern District of Florida

ROY J. DIXON JR. and BLANCHE L. DIXON, Plaintiffs, v. GREEN TREE SERVICING, LLC n/k/a DITECH FINANCIAL LLC SUCCESSOR BY MERGER,

COUNTRYWIDE FINANCIAL CORPORATION, COUNTRYWIDE BANK, COUNTRYWIDE HOME

LOANS, INC., COUNTRY WIDE HOME LOANS SERVICING LP, BAC HOME LOANS SERVICING

LP, n/k/a BANK OF AMERICA, NA SUCCESSOR BY MERGER, FANNIE MAE, Defendants.

Case No. 19-80022-CIV-MARRA/MATTHEWMAN

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

July 3, 2019

ORDER AND OPINION ON THIRD MOTION TO AMEND

THIS CAUSE is before the Court upon Dixons' Motion Requesting Leave to File a Verified Second Amended Complaint Pursuant to FRCP Rule 15(a), Rule 19(a) and Rule 18(a) [DE 47] ("Third Motion to Amend"). The Court has carefully considered the motion, responses, reply, oral argument at a hearing on May 10, 2019, and is otherwise fully advised in the premises.

Procedural History and Background

1. On January 8, 2019, Roy J. Dixon Jr. And Blanche L. Dixon ("Plaintiffs" or "the Dixons") filed a Complaint against Green Tree Servicing, LLC n/k/a Ditech Financial LLC ("Ditech") (DE 1).

2. On February 6, 2019, the Dixons filed a Verified Amended Complaint against "Green Tree Servicing, LLC n/k/a Ditech Financial LLC Successor by Merger, Countrywide Financial Corporation, Countrywide Bank, Countrywide Home Loans, Inc., Countrywide Home Loans Servicing LP, BAC Home Loans Servicing LP, n/k/a Bank of America, N.A. Successor by Merger, and Fannie Mae" (DE 4).

3. Defendants Federal National Mortgage Association ("Fannie Mae") (DE 23) and Bank of America N.A. ("BOA") (DE 37) filed Motions to Dismiss the Amended Complaint with Prejudice.

4. The Dixons filed an "Amended¹ Motion Requesting Leave to File a Verified Second Amended Complaint Pursuant to FRCP Rule 15(a)(2), Rule 19(a) and Rule 18(a) and Requests 15 Days Extension of Time to Finish the Complaint" (DE 38) ("Second Motion to Amend").

5. Defendants BOA (DE 46), and Fannie Mae, jointly with Ditech (DE 42), filed responses to the Second Motion to Amend.

6. The Dixons then filed the instant Third Motion to Amend (DE 47). The Third Motion to Amend, unlike the first or Second Motion to Amend, attaches a proposed Second Amended Complaint.

7. Ditech (DE 48), BOA (DE 55), and Fannie Mae (DE 59) filed responses to the Third Motion to Amend.

8. Defendants' responses to the Dixons' Second Motion to Amend are incorporated by reference in the responses to the Dixons' Third Motion to Amend, which together challenge all the causes of actions the Dixons wish to bring.

9. The proposed Second Amended Complaint (DE 47-2) adds five new claims and three new defendants: Federal Housing Finance Agency, as Conservator of the Federal National Mortgage Association, Law firm of Roberson, Anschutz & Schneid PL, and Erik T. Samsing in his individual capacity.

10. Plaintiffs proceeded for some time under the misguided belief that they removed a state foreclosure action to this Court. They did not, and were so advised in an Order Denying Motion to Quash and Motion for Reconsideration (DE 53), and at the hearing held on May 10, 2019. The proposed Second Amended Complaint improperly includes a description of this lawsuit as a removed action. See, e.g., DE 47-2 at 1.

11. The proposed Second Amended Complaint asserts the following claims:

1) Beach of Contract;

2) Violation of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA");

3) Violation of the Fair Dept Collection Practices Act ("FDCPA");

4) Violation of 15 USC §1641(a)(c)(d)(2)(B)(e)(1)(A)(B)(f)(1)(2)(g)(1) (the "TILA Claim");5) Violation of 10 U.S.C. § 921(a)(1): Larceny and wrongful appropriation;

6) Civil RICO;

7) Fraudulent Misrepresentation;

8) Mortgage Fraud;

9) Gross Negligence;

10) Civil Theft; and

11) Quiet Title and Rescission of the 2011 Loan Modification.

Legal Standard

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead sufficient facts to state a claim that is "plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) ("Iqbal") (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) ("Twombly"). The Court's consideration is limited to the allegations presented. See GSW, Inc. v. Long Cty., 999 F.2d 1508, 1510 (11th Cir. 1993). All factual allegations are accepted as true and all reasonable inferences are drawn in the plaintiff's favor. See Speaker v. U.S. Dep't of Health & Human Servs. Ctrs. for Disease Control & Prevention, 623 F.3d 1371, 1379 (11th Cir. 2010); Roberts v. Fla. Power & Light Co., 146 F.3d 1305, 1307 (11th Cir. 1998). Nevertheless, while a plaintiff need not provide "detailed factual allegations," the allegations must consist of more than "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555 (internal citations and quotations omitted). "[C]onclusory allegations, unwarranted factual deductions or legal conclusions masquerading as facts will not prevent dismissal." Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir. 2003). The "[f]actualallegations must be enough to raise a right of relief above the speculative level." Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 545).

In addition to the requirements of Twombly, Iqbal, and Federal Rule of Civil Procedure 12(b), causes of action sounding in fraud are subject to the heightened pleading standards of Federal Rule of Civil Procedure 9(b). See Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309, 1316 (11th Cir. 2007) ("Ambrosia Coal"). That rule provides that "[i]n alleging of fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake" but that "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). Consequently, "[t]o satisfy the Rule 9(b) standard, [fraud claims] must allege: (1) the precise statements, documents, or misrepresentations made; (2) the time and place of and person responsible for the statement; (3) the content and manner in which the statements misled the Plaintiffs; and (4) what the Defendants gained by the alleged fraud." Ambrosia Coal, 482 F.3d at 1316-17 (citing Brooks v. Blue Cross & Blue Shield, 116 F.3d 1364, 1380-81 (11th Cir. 1997) ("Brooks")).

Unless otherwise specified, a party may amend its pleading "only with the opposing party's written consent or the court's leave." Fed. R. Civ. P. 15(a)(2). The Rule goes on to state that "[t]he court should freely give leave when justice so requires." Id. Despite the rule that leave to amend should be given freely, the court may deny leave to amend on numerous grounds, including the futility of theamendment. Maynard v. Bd. of Regents of Div. of Univs. of Florida Dept. of Educ. ex rel. Univ. of S. Florida, 342 F.3d 1281, 1287 (11th Cir. 2003). Futility justifies the denial of leave to amend where the complaint, as amended, would still be subject to dismissal. Burger King Corp. v. Weaver, 169 F.3d 1310, 1320 (11th Cir. 1999) (citations omitted); Bruce v. U.S. Bank Nat'l Assoc., - F.App'x -, Case No. 18-10553, 2019 WL 1959619, at *1 (11^th Cir. May 2, 2019) ("The district court was correct that [Plaintiffs'] claims, as pleaded in the complaint, were outside the statute of limitations and that allowing [Plaintiffs] to amend their complaint would have been futile.")

Because Plaintiffs are proceeding pro se, however, their Complaint must be "liberally construed." Erickson v. Pardus, 551 U.S. 89 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976). "[A] pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers." Id.; see also Fed. R. Civ. P. 8(e) ("Pleadings must be construed so as to do justice").

Discussion

Defendant Ditech

On March 8, 2019, Ditech filed a Notice of Bankruptcy and Imposition of Automatic Stay (DE 17). In response thereto, this Court entered an Order On Suggestion Of Bankruptcy (DE 31) on March 20, 2019, automatically staying this civil action as to Ditech (the "Stay Order").

The Dixons' proposed Second Amended Complaint asserts legal claims against Ditech that request monetary damages. As such, the Third Motion to Amend not onlyviolates the automatic stay in Ditech's Chapter 11 bankruptcy case in the Southern District of New York, but also violates this Court's March 20, 2019 Stay Order, which was entered weeks before the Third Motion to Amend was filed. Any actual complaint subsequently filed that seeks monetary damages against Ditech would violate this Court's Stay Order and the automatic stay in Ditech's Chapter 11 bankruptcy case, and is void and without legal effect. Borg-Warner Acceptance Corp. v. Hall, 685 F.2d 1306, 1308 (11^th Cir. 1982). Furthermore, it should be noted that parties willfully violating the automatic stay may find themselves subject to compensatory and punitive damages. Hon. W. Homer Drake, Jr. et al, Chapter 11 Reorganizations, § 9:5 Automatic stay (2d ed.).

Defendant Fannie Mae

The Dixons' proposed Second Amended Complaint drops Fannie Mae as a named defendant and does not appear to assert any claims against Fannie Mae. Accordingly, Fannie Mae's (DE 23) Motion to Dismiss with Prejudice the Amended Complaint is rendered moot.

Defendant Bank of America

Plaintiffs sue BOA, individually and as successor by merger to BAC Home Loans Servicing, LP.²

As an initial matter, BOA asserts each count fails to state a proper cause of action under Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). Additionally, BOA challenges each allegation in the new counts as an impermissible "shotgun pleading."³

I. Breach of Contract

In their First Cause of Action, the Dixons appear to allege that BOA and Ditech breached two contracts: the "2007 and 2011 mortgage contracts. . ." DE 47-2, ¶ 86. The statute of limitations to bring a claim for breach of contract is five years. See Florida Statute § 95.11(2)(b). As such, BOA asserts this claim is either seven years or...