Glass v. Finley
| Decision Date | 17 January 2020 |
| Docket Number | CASE NO. 3:19-CV-01216 |
| Parties | DAVID CHRISTOPHER GLASS v. KRISTY MASSEY FINLEY, ET AL. |
| Court | U.S. District Court — Western District of Louisiana |
Before the undersigned magistrate judge, on reference from the District Court, are two Rule 12(b)(6) motions to dismiss for failure to state a claim upon which relief can be granted - one [doc. # 26] filed by defendant, First Guaranty Mortgage Corporation, and the other [doc. # 28] filed by defendants, Dean Morris, L.L.C. and Kristy Massey Finley. The motions are unopposed. For reasons assigned below, it is recommended that the motions to dismiss be GRANTED.
On September 17, 2019, David Christopher Glass ("Glass") filed the instant $2 million civil lawsuit for non-judicial wrongful foreclosure against defendants, First Guaranty Mortgage Corporation ("FGMC"); its agent, Dean Morris, L.L.C. ("DMC"); and an attorney associated with DMC, Kristy Massey Finley ("Finley"). (Compl.). The complaint alleges that on December 14, 2011, Glass purchased a home and obtained a $107,500 mortgage loan from American Home Free Mortgage, L.L.C. ("AHFM"). Id., ¶ 12.1. That same day, AHFM endorsed the note over to FGMC., Id., ¶ 12.2; see also Endorsement Allonge to Note; M/Dismiss, Exh.1
From January 2012 until November 2018, Glass made timely payments to the mortgage servicers. (Compl., ¶ 12.4). In early 2019, FGMC claimed that Glass was behind on his payments and hired a foreclosure attorney to commence foreclosure proceedings. Id., ¶ 12.5. On January 30, 2019, FGMC, through its agent, DMC, and attorney Finley, filed a Petition to Enforce Security Interest by Executory Process against Glass in the Fifth Judicial District for the Parish of Richland, State of Louisiana. Id., ¶ 12.6; see also First Guaranty Mortgage Corporation v. Glass, No. 46889-C (5th JDC 2019) (Compl., Exh.). On February 4, 2019, a Fifth Judicial District Judge ordered the issuance of a writ of seizure and sale for the property affected by the subject mortgage. Id. According to plaintiff, the foreclosure was scheduled for April 17, 2019. (Compl., ¶ 12.6).
On April 15, 2019, Glass filed a Chapter 13 petition for bankruptcy protection. In Re: David Glass, No. 19-30590 (Bankr. W.D. La.).2 On his schedule of creditors, Glass acknowledged a $109,388.00 mortgage debt that he opened on December 14, 2011, which he owed to Rushmore Loan Management.3 Id., [doc. #2]. He added, however, that DMC and FGMC needed to be notified about his bankruptcy filing for purposes of this debt. Id. Glass further admitted that his debt to Rushmore Loan Management was $17,500 in arrears before he filed his bankruptcy petition. Id., [doc. # 10]. The debt was secured by a double-wide mobile home and two acres of land. Id., [doc. #s 2 & 10].
On plaintiff's motion, the bankruptcy court dismissed his bankruptcy petition on June 17,2019. Id., [doc. # 21]. The bankruptcy court issued its final decree and closed the case on September 17, 2019. Id., [doc. # 24]. That same day, plaintiff filed the instant suit with this court. On September 18, 2019, the Sheriff sold plaintiff's mortgaged property to the highest bidder, FGMC, for the total sum of $3,128.07. See Sheriff's Act of Sale (M/Dismiss, Exh.).
In the instant suit, Glass contends that the foreclosure process was void for lack of evidence and various other deficiencies. For example, he asserts that he never received a loan; rather it was the execution of a signed promissory note in exchange for "electronic credits from the Federal Reserve." Glass further asserts that there was a conspiracy to deprive him of property without the administration of justice in violation of his due process rights under 42 U.S.C. §§ 1983, 1985, and 1986. He contends that the original contract and an accounting of the loan entries were never filed in the wrongful foreclosure case, and therefore, the attorney who signed the foreclosure petition did not have standing to do so.
Plaintiff further argues that he is entitled to rescission of the original loan contract because defendants did not provide full disclosure as required by the Truth in Lending Act ("TILA"). He also asserts a claim for detrimental reliance because he was "tricked" into repaying about $790.00 per month, including insurance and taxes, when a loan never was provided. He alleges that defendants collected on an unlawful debt which provides him with a civil remedy under the Racketeer Influenced and Corrupt Organizations Act ("RICO"). Glass also claims: to have suffered slanders of title and credit, that defendants violated Louisiana's Unfair Trade Practices and Consumer Protection Act, and that defendants subjected him to intentional infliction of emotional distress. In addition, he asserts that FGMC, and/or its attorney, transmitted to various credit reporting agencies, including Equifax, false, adverseinformation about the plaintiff, thereby causing his credit rating to be impaired. Plaintiff seeks a total of $2 million in compensatory and punitive damages stemming from defendants' wrongful conduct.
On October 10, 2019, defendants, Finley, DMC, and FGMC, filed a motion to dismiss for lack of subject matter jurisdiction. They argued that the court lacked diversity jurisdiction, and that a federal question did not appear on the face of plaintiff's complaint. On November 4, 2019, the undersigned recommended that the motion to dismiss be denied because plaintiff plainly invoked several federal causes of action on the face of his complaint.4 (Nov. 4, 2019, R&R [doc. # 15]). The District Court adopted the R&R on November 21, 2019. [doc. # 17]. Defendants filed an answer to the suit on December 5, 2019. (Answer [doc. # 18]).
On December 16, 2019, defendants filed the instant motions to dismiss for failure to state a claim upon which relief can be granted. In support of FGMC's motion to dismiss, it attached filings from the state court foreclosure proceeding referenced in plaintiff's complaint.
Plaintiff did not file a brief(s) in opposition to the motions to dismiss, and the time to do so has lapsed. See Notice of Motion Setting. [doc. # 29]. Accordingly, the motions are deemed unopposed. Id. The matter is ripe.
The Federal Rules of Civil Procedure sanction dismissal where the plaintiff fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6).5 A pleading states a claim forrelief when, inter alia, it contains a "short and plain statement . . . showing that the pleader is entitled to relief . . ." Fed.R.Civ.P. 8(a)(2).
To withstand 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, 678, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007)). A claim is facially plausible when it contains sufficient factual content for the court "to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Plausibility does not equate to possibility or probability; it lies somewhere in between. See Iqbal, supra. Plausibility simply calls for enough factual allegations to raise a reasonable expectation that discovery will reveal evidence to support the elements of the claim. See Twombly, 550 U.S. at 556, 127 S.Ct. at 1965. Although the court must accept as true all factual allegations set forth in the complaint, the same presumption does not extend to legal conclusions. Iqbal, supra. A pleading comprised of "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" does not satisfy Rule 8. Id. "[P]laintiffs must allege facts that support the elements of the cause of action in order to make out a valid claim." City of Clinton, Ark. v. Pilgrim's Pride Corp., 632 F.3d 148, 155 (5th Cir. 2010).
Assessing whether a complaint states a plausible claim for relief is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.(citation omitted). A well-pleaded complaint may proceed even if it strikes the court that actual proof of the asserted facts is improbable, and that recovery is unlikely. Twombly, supra. Nevertheless, a court is compelled to dismiss an otherwise well-pleaded claim if it is premised upon an invalid legal theory. Neitzke v. Williams, 490 U.S. 319, 109 S.Ct. 1827 (1989).
Rule 9(b) requires that circumstances constituting fraud or mistake be alleged with particularity. Fed.R.Civ.P. 9(b). The particularity demanded by Rule 9(b) supplements Rule 8(a)'s pleading requirement. U.S. ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 185 (5th Cir. 2009). Allegations of fraud under Louisiana law asserted in federal court implicate the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Unimobil 84, Inc. v. Spurney, 797 F.2d 214, 217 (5th Cir. 1986); Conerly Corp. v. Regions Bank, 2008 WL 4975080 (E.D. La. Nov. 20, 2008). However, "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed.R.Civ.P. 9(b). What constitutes sufficient particularity for Rule 9(b) varies with the facts of each case. Guidry v. Bank of LaPlace, 954 F.2d 278, 288 (5th Cir. 1992). At minimum, however, Rule 9(b) requires a plaintiff pleading fraud to "to specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent." Herrmann Holdings Ltd. v. Lucent Technologies Inc., 302 F.3d 552, 564-565 (5th Cir. 2002) (). Nonetheless, the "'time, place, contents, and identity' standard is not a straitjacket for Rule 9(b)." Grubbs, 565 F.3d at 190.
When considering a motion to dismiss, courts generally are limited to the complaint and its proper attachments. Dorsey v. ...
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