Jackson v. Bank of America, N.A., 080318 FED11, 16-16685

Docket Nº:16-16685
Opinion Judge:OFLAT, CIRCUIT JUDGE
Party Name:KARUN N. JACKSON, URSULA D. JACKSON, Plaintiffs - Appellants, v. BANK OF AMERICA, N.A., Defendant, SPECIALIZED LOAN SERVICING LLC, BANK OF NEW YORK MELLON, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants - Appellees.
Judge Panel:Before TJOFLAT and JULIE CARNES, Circuit Judges, and BLOOM, District Judge. BLOOM, District Judge, specially concurring
Case Date:August 03, 2018
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
SUMMARY

The Eleventh Circuit affirmed the district court's dismissal of the case with prejudice for failure to state a claim, but on an alternative ground. The court held that counsel for homeowners filed a multi-count, incomprehensible complaint that flouted the Federal Rules of Civil Procedure and this Circuit's well-established precedent. The court found that plaintiffs obstructed the due... (see full summary)

 
FREE EXCERPT

KARUN N. JACKSON, URSULA D. JACKSON, Plaintiffs - Appellants,

v.

BANK OF AMERICA, N.A., Defendant,

SPECIALIZED LOAN SERVICING LLC, BANK OF NEW YORK MELLON, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants - Appellees.

No. 16-16685

United States Court of Appeals, Eleventh Circuit

August 3, 2018

Appeal from the United States District Court for the Southern District of Alabama D.C. Docket No. 1:16-cv-00062-CG-M

Before TJOFLAT and JULIE CARNES, Circuit Judges, and BLOOM, [*] District Judge.

OFLAT, CIRCUIT JUDGE

This appeal involves an abuse of process engineered to delay or prevent execution of a foreclosure judgment on a residence and the consequent eviction of its occupants. The homeowners' counsel effectuated this scheme by filing a multi-count, incomprehensible complaint that flouted the Federal Rules of Civil Procedure and this Circuit's well-established precedent. The District Court gave counsel an opportunity to file an amended complaint that comported with the requirements of the Federal Rules of Civil Procedure.1 Counsel amended the complaint. He made no effort to correct its deficiencies, however, choosing to stand on his deficient pleading. The District Court nonetheless accepted the amended complaint, going to great lengths to sort it out.

After spending fifty-four pages unpacking the pleading just to determine whether the amended complaint presented a cognizable basis for relief, the District Court dismissed the case with prejudice for failure to state a claim. We affirm the District Court's judgment, but we do so on an alternative ground. By attempting to prosecute an incomprehensible pleading to judgment, the plaintiffs obstructed the due administration of justice in the District Court. And they are doing the same here in urging this Court to uphold the sufficiency of their amended complaint.

I.

A.

The facts of this case demonstrate the scheme's operation. Karun and Ursula Jackson, represented by Kenneth Lay, a Birmingham, Alabama lawyer, 2brought this action against Bank of America, N.A., Specialized Loan Servicing LLC ("SLS"), Bank of New York Mellon ("Mellon"), and Mortgage Electronic Registration Systems, Inc. ("MERS") in the Circuit Court of Baldwin County, Alabama on January 12, 2016, one day after the foreclosure sale of their residence. The Jacksons' complaint alleged fourteen causes of action under Alabama and federal law in separate counts, spanned twenty pages, and contained 109 paragraphs of allegations. The causes of action were not defendant-specific, all were based on all of the complaint's twenty-four introductory paragraphs, and all fourteen causes of action incorporated all previous allegations. This made it impossible for any Defendant to reasonably frame an answer. The crux of the complaint appears to be that Defendants3 classified their home mortgage as in default, accelerated their loan, turned over their account for foreclosure, and reported the foreclosure to the credit reporting agencies without any legitimate basis for doing so.

Specifically, the Jacksons alleged that they purchased a house in Daphne, Alabama on August 28, 2006. To finance the purchase, they executed a mortgage and a promissory note with First Residential Mortgage Network, Inc. for $139, 040.00. As specified in the mortgage agreement, MERS acted as the servicer for the loan. First Residential later sold and assigned the note and mortgage to Mellon.

The Jacksons further alleged that from the date they bought the house until September 2012, Defendants accepted and cashed their monthly mortgage payments, but did not apply the payments to the Jacksons' account. Then, in November 2012, Defendants rejected a check from the plaintiffs without explanation. The Jacksons alleged that when they called to find out what happened, Defendants told them that "they were in default for failure to make payments, but could not explain why they were allegedly in default." According to the Jacksons, Defendants further announced that they would no longer accept any mortgage payments and that their mortgage would be turned over for foreclosure.

The complaint avers that, in accordance with this statement, Defendants returned all of the monthly payments made from November 2012 to January 2014. Then, on June 12, 2015, Defendants accelerated the mortgage and demanded payment. On November 8, 2015, Defendants initiated foreclosure proceedings in Baldwin County, Alabama. They published notice of the default and foreclosure sale in the local newspaper in both November and December of 2015. The foreclosure sale occurred on January 11, 2016, and the property was sold to Mellon, the highest bidder at the sale. The foreclosure was reported to the national credit bureaus.

Based on these allegations, the Jacksons presented fourteen counts: (1) negligence; (2) wantonness; (3) unjust enrichment; (4) wrongful foreclosure; (5) slander of title; (6) breach of contract; (7) fraud; (8) false light; (9) defamation, libel, and slander; (10) violations of the Truth in Lending Act; (11) violations of the Real Estate Settlement Procedures Act; (12) violations of the Fair Credit Reporting Act; (13) violations of the Fair Debt Collection Practices Act; and a (14) claim for declaratory relief. According to the complaint, Defendants' conduct caused the Jacksons "to have negative credit reports" and to be "denied homeowners insurance, held up to public ridicule or shame, humiliated, made to suffer physically and mentally, and endure anguish."

The Jacksons sought "(1) [a]n Order declaring that they are not in default of their mortgage agreement and declaring the notice of default is null and void," "(2) [a]n order declaring that Defendants have no right or authority to foreclose on the Jacksons' property," "(3) [a]n Order prohibiting Defendants from foreclosing on the Jacksons' property," and (4) compensatory and punitive damages for the various forms of financial, emotional, and defamatory harm alleged. The request for declaratory and injunctive relief, which if granted would undo the foreclosure sale and restore the Jacksons' mortgage on the home, made the suit the functional equivalent of a collateral attack on the validity of the foreclosure proceedings.

B.

On February 12, 2016, Defendants removed the case to federal court pursuant to 28 U.S.C. § 1331. On February 19, all Defendants moved for a more definite statement pursuant to Federal Rule of Civil Procedure 12(e), with Bank of America filing its own, separate motion and the other Defendants filing their motion jointly. Defendants identified three problems with the complaint: first, the complaint was a shotgun pleading that incorporated all of its factual allegations into each count; second, the complaint failed to identify the specific Defendant(s) to which each count pertained; and third, the complaint "omit[ted] key facts such as relevant dates and the particular nature of the violations that [Defendants] allegedly committed." The motion was referred to a Magistrate Judge on February 22. The Jacksons responded that they did not oppose the motion and were willing to file an amended complaint, but moved the District Court for twenty-one days to prepare a revised pleading. The District Court granted the motion, giving the Jacksons twenty-one days to file an amended complaint.

On March 29, 2016, the day the amended complaint was due, Mr. Lay moved the District Court for an extension of the deadline to file the revised pleading. Mr. Lay stated that he had been out of the office due to illness and asked for seven more days. The Magistrate Judge, on referral, granted the motion and gave the Jacksons until April 5 to file their amended complaint. On April 10, five days after the expiration of the extended deadline, and without having filed the amended complaint, Mr. Lay requested another extension. This time, he stated that he had been out of the office due to illness and a death in his family and asked for an additional seven days. Defendants did not oppose his request. The Magistrate Judge granted the motion and extended the deadline to April 12.

The Jacksons filed their amended complaint on April 12. The amended complaint swelled to twenty-three pages and 123 paragraphs, made minor changes to a number of the factual allegations, added two new counts, 4 and listed one or more Defendants in parentheses under the heading of each count-presumably to clarify which count(s) applied to which Defendant(s). Counts (1) through (14) alleged the same injuries and requested the same forms of relief as those contained in the initial complaint.

The amended complaint was, like its predecessor, a shotgun pleading: it incorporated all of the factual allegations into each count without delineating which allegations pertained to each count. On April 29, Bank of America answered the amended complaint, denying...

To continue reading

FREE SIGN UP