Estate of Wyatt v. WAMU/JP Morgan Chase Bank
| Decision Date | 20 March 2012 |
| Docket Number | Case Number 09-14919 |
| Parties | ESTATE OF JAMES C. WYATT, II, and LAYDELL WYATT, Plaintiffs, v. WAMU/JP MORGAN CHASE BANK, PATHWAY FINANCIAL, and TROTT AND TROTT, P.C., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Honorable David M. Lawson
The matter is before the Court on objections to a report filed by Magistrate Judge Michael J. Hluchaniuk recommending that a motion to dismiss filed by defendant WAMU/JP Morgan Chase Bank be granted. The plaintiffs filed a pro se complaint against the defendants alleging violations of federal law when the defendants attempted to collect payments and initiate foreclosure proceedings on the plaintiffs' house based on a mortgage that the plaintiffs allege does not exist and never existed. Their original complaint alleged a violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act. The Court entered an order referring the case to the magistrate judge to conduct all pretrial matters. The Court entered a previous order on an earlier report and recommendation issued by Judge Hluchaniuk and referred the case back to him. Defendant Chase then filed another motion to dismiss on August 29, 2011, to which the plaintiffs responded. Judge Hluchaniuk filed his report on January 11, 2012 recommending that the motion be granted and the case dismissed against Chase. The plaintiffs filed objections and the case is before this Court forde novo review. The Court concludes that the plaintiffs' objections lack merit, the magistrate judge correctly concluded that the plainitffs abandoned all their claims except their RICO claim, and the amended complaint clearly does not meet the continuity requirement for pleading RICO's pattern-of-racketeering-activity requirement as construed by the Sixth Circuit. Therefore, the Court will adopt the magistrate judge's report and recommendation and grant defendant Chase's motion to dismiss.
The facts of the case were set forth in detail by the magistrate judge in his first report and summarized by this Court thereafter in its opinion on that report and recommendation. They need not be repeated here, although there have been some procedural developments that deserve mention.
As mentioned in the magistrate judge's first report, defendant Chase filed a motion to dismiss the original complaint, arguing that the complaint did not state claims for which relief can be granted. Thereafter, the plaintiffs filed a motion to amend the complaint to restate their RICO count and add claims to quiet title, violation of the Fair Debt Collection Practices Act, violation of the Fair Credit Reporting Act, defamation, and intentional infliction of emotional distress. The magistrate judge filed a report suggesting that the probate exception ousted this Court's jurisdiction, and also recommended vacating a default judgment against defendant Pathway Financial. The Court adopted the recommendation to set aside the default judgment and rejected the recommendation to dismiss the case for want of subject matter jurisdiction. The Court also referred to several shortcomings in the plaintiffs' proposed amended complaint, and although an amendment was permitted, the Court did not accept the proposed amended complaint. The Court's order outlines in great detail the guidelines for a claim under RICO.
The plaintiffs then filed a new amended complaint on August 16, 2011. Despite their stated intention to add other claims for relief, the only claim the plaintiffs identified in the amended complaint is based on a violation of RICO. Defendant Chase responded with a motion to dismiss. The magistrate judge ordered the plaintiffs to file a response by October 18, 2011. They filed their response late on November 2, 2011, but the magistrate judge allowed it. Judge Hluchaniuk filed his report on January 11, 2011 recommending that the motion be granted.
In his report, the magistrate judge concluded that the plaintiffs abandoned all their possible claims except the RICO claim because the plaintiffs did not include those other claims in their amended complaint, and when defendant Chase addressed those potential claims in its new motion to dismiss, the plaintiffs did not respond to those arguments. The Court agrees that the only claim in play presently is the RICO claim.
The magistrate judge then suggested that the plaintiffs' amended complaint, even construed liberally, failed to state a RICO claim. After outlining the pleading requirements of RICO and the requirements for establishing standing under section 1964(c), the magistrate judge found that the plaintiffs' fraud claims were not sufficient to establish the predicate acts necessary for a RICO claim. The magistrate judge also concluded that the plaintiffs' attempt to predicate their RICO claim on the collection of an unlawful debt, if indeed they were trying to do that, must fail because there is no suggestion in the complaint that the $232,000 loan to James Wyatt was either a gambling-related debt or usurious, which is how "unlawful debt" is defined by RICO. See 18 U.S.C. § 1961(6). Relying on Moon v. Harrison Piping Supply, 465 F.3d 719, 724 (6th Cir. 2006), the magistrate judge found that the plaintiff failed to plead facts that would support the conclusion that the predicate acts are related and pose a threat of continuing criminal activity.
As mentioned, the magistrate judge recommended that Chase's motion to dismiss be granted.
The plaintiffs filed timely objections, listing six grounds. First, the plaintiffs object that they were denied their right to be heard because the plaintiffs were ordered to respond to the motion to dismiss by January 30, 2012, and the report and recommendation was entered on January 11, 2012. Second, the plaintiffs object because the Court has proper subject matter jurisdiction over the complaint because the plaintiffs are seeking relief under 18 U.S.C. § 1964. Third, the plaintiffs state that the report and recommendation "impairs the promotion of simplicity in procedures, obstructs the just determination of litigation, fails to eliminate unnecessary unjustifiable expenses and delay." Pls.' Obj. at 6. Fourth, the plaintiffs state that the report and recommendation "violates Laydell Wyatt's constitutional right to be secure in her person and property and . . . to protect her home against unlawful seizure." Id. at 7. Fifth, the plaintiffs argue that the report and recommendation denies the plaintiffs' right to equal protection of the law. Sixth, the plaintiffs refute the conclusion that the amended complaint fails to state a RICO claim because it alleges that the defendants committed two or more predicate acts in a ten-year span, the predicate acts were related to one another, and the predicate acts demonstrate criminal conduct of a continuing nature.
Defendant Chase filed a response to the objections.
At the outset, it is useful to note that objections to a report and recommendation are reviewed de novo. 28 U.S.C. § 636(b)(1).
The Sixth Circuit has stated that "[o]verly general objections do not satisfy the objection requirement." Spencer v. Bouchard, 449 F.3d 721, 725 (6th Cir. 2006). "The objections must be clear enough to enable the district court to discern those issues that are dispositive and contentious." Miller v. Currie, 50 F.3d 373, 380 (6th Cir. 1995). "'[O]bjections disput[ing] the correctness of the magistrate's recommendation but fail[ing] to specify the findings . . . believed [to be] in error' are too general." Spencer, 449 F.3d at 725 (quoting Miller, 50 F.3d at 380).
"[T]he failure to file specific objections to a magistrate's report constitutes a waiver of those objections," Cowherd v. Million, 380 F.3d 909, 912 (6th Cir. 2004), and releases the Court from its duty to independently review the motion, see Thomas v. Arn, 474 U.S. 140, 149 (1985) (); Smith v. Detroit Fed'n of Teachers Local 231, 829 F.2d 1370, 1373 (6th Cir. 1987).
A pro se litigant's complaint is to be construed liberally, Erickson v. Pardus, 551 U.S. 89, 94 (2007), and is held to "less stringent standards" than a complaint drafted by counsel, Haines v. Kerner, 404 U.S. 519, 520 (1972). Nonetheless, "[t]he leniency granted to pro se [litigants] . . . is not boundless,"Martin v. Overton, 391 F.3d 710, 714 (6th Cir. 2004), and such complaints still must plead facts sufficient to show a redressable legal wrong has been committed, Fed. R. Civ. P. 12(b); Dekoven v. Bell, 140 F. Supp. 2d 748, 755 (E.D. Mich. 2001). To plead a case under the current regime, a plaintiff "must plead 'enough factual matter' that, when taken as true, 'state[s] a claim to relief that is plausible on its face.'" Fabian v. Fulmer Helmets, Inc., 628 F.3d 278, 280 (6th Cir. 2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 570 (2007)). "Plausibility requiresshowing more than the 'sheer possibility' of relief but less than a 'probab[le]' entitlement to relief." Ibid. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009)).
A motion to dismiss under Rule 12(b)(6) is confined to a consideration of the pleadings. Jones v. City of Cincinnati, 521 F.3d 555, 562 (6th Cir. 2008). "[A] court may accept 'matters outside the pleadings,' but in doing so it generally must treat the motion 'as one for summary judgment under Rule...
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