Kirby v. Resmae Mortg. Corp.

• Decision Date: 16 December 2014
• Docket Number: Case No. 14-CV-389-GKF-FHM
• Parties: ELBERT KIRBY, JR., CALEB MEADOWS, and JOHN DOE, Plaintiffs, v. RESMAE MORTGAGE CORPORATION, LASALLE BANK NATIONAL ASSOCIATION, US BANK NATIONAL ASSOCIATION, and OCWEN LOAN SERVICING, LLC, Defendants.
• Court: U.S. District Court — Northern District of Oklahoma

ELBERT KIRBY, JR., CALEB MEADOWS, and JOHN DOE, Plaintiffs, v. RESMAE MORTGAGE CORPORATION, LASALLE BANK NATIONAL ASSOCIATION, US BANK NATIONAL ASSOCIATION,and OCWEN LOAN SERVICING, LLC, Defendants.

Case No. 14-CV-389-GKF-FHM

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA

December 16, 2014

OPINION AND ORDER

Before the court is the motion of plaintiffs Elbert Kirby and Caleb Meadows, appearing pro se, for default judgment against defendant Resmae Mortgage Corporation ("Resmae") [Dkt. #22], their motion for additional time to serve defendant Ocwen Loan Servicing, LLC [Dkt. #20], and their motion for alternate service by first class mail [Dkt. #21]. As discussed below, the court finds that the attempted service of process on Resmae was insufficient, and that plaintiffs' Complaint [Dkt. #2] fails to state a claim on which relief may be granted. The plaintiffs' motions are denied, and their Complaint is dismissed without prejudice.

I. Procedural Background

The plaintiffs filed their Complaint on July 11, 2014. [Dkt. #2]. The court subsequently granted the plaintiffs' motion for leave to proceed in forma pauperis. [Dkt. #11]. Returns of service were filed with respect to defendants US Bank National Association [Dkt. #13], Resmae [Dkt. #14], and LaSalle Bank National Association [Dkt. #15] on November 4, 2014. On the returns of service for US Bank National Association and LaSalle Bank National Association,however, the U.S. Marshals Service certified that it was unable to locate those defendants. [Dkt. ##13, 15]. Only on the return of service for Resmae did the U.S. Marshal Service certify that it had some evidence of attempted service, having left the summons and complaint in a bin located on a receptionist's desk on the third floor of the corporate offices in Wilmington, Delaware. [Dkt. #14]. No return of service has been filed with respect to defendant Ocwen Loan Servicing, LLC.

On December 1, 2014, the court directed the plaintiffs to show cause why the court should not dismiss the action without prejudice as to the unserved defendants. [Dkt. #16]. On December 10, 2014, the plaintiffs moved for additional time to serve Ocwen Loan Servicing, LLC [Dkt. #20], for permission to serve US Bank National Association and LaSalle Bank National Association by first class mail [Dkt. #21], and for default judgment against Resmae [Dkt. #22]. Upon the plaintiffs' motion [Dkt. #19], the Court Clerk entered default against Resmae on December 12, 2014. [Dkt. #23].

II. Discussion

Service of process under Fed. R. Civ. P. 4 "provides the mechanism by which a court having venue and jurisdiction over the subject matter of an action asserts jurisdiction over the person of the party served." Hukill v. Oklahoma Native American Domestic Violence Coalition, 542 F.3d 794, 797 (10th Cir. 2008) (finding that the plaintiff failed to properly serve the defendant when she left service with a receptionist at the defendant's business address). "The plaintiffs bear the burden of demonstrating that the court has personal jurisdiction over the parties, including valid service of process." Habyarimana v. Kagame, 821 F.Supp.2d 1244, 1251 (W.D. Okla. 2011) (citing Claus v. Mize, 317 F.3d 725, 727 (7th Cir. 2003); Carimi v. RoyalCarribean Cruise Line, Inc., 959 F.2d 1344, 1346 (5th Cir. 1992); 5A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure, § 1353 (2d ed. 1990)).

Fed. R. Civ. P. 4(h) provides that a corporation or business entity may be served in one of two ways: (i) by serving it in the same manner in which one would serve an individual person under Rule 4(e)(1), or (ii) by delivering the process to "an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process. . . ." In pertinent part, Rule 4(e) allows for service upon an individual by delivering a copy of the summons and complaint to the individual personally, or to an agent authorized to receive service of process. Rule 4(e) also allows for service upon an individual by following the methods provided by the laws of the state in which the district court is located or where service is made. Under both Oklahoma and Delaware law, to effect service of process by personal delivery, the process server must deliver a copy of the summons and the petition or complaint with a designated person, such as the individual being served (Okla. Stat. tit 12 § 2004(C)(1)(c)(1); Del. Super. Ct. Civ. R. 4(f)(1)(I)) or an agent authorized to receive service of process (Okla. Stat. tit. 12 § 2004(C)(1)(c)(3); Del. Super. Ct. Civ. R. 4(f)(1)(III)).

Each of these methods for effecting service by personal delivery has one requirement in common: the summons and complaint must be left with a certain person, such as the individual being served or a designated agent. In this case, however, the return of service for Resmae was not given to any individual; instead, it was left in a bin located on the receptionists' desk located on the third floor of the corporate office. [Dkt. #14]. Whether under Oklahoma law, Delaware law, or the Federal Rules of Civil Procedure, service was insufficient. The court therefore lacks personal jurisdiction over Resmae. As such, the plaintiffs' motion for default judgment [Dkt. #22] must be denied, and the Clerk's entry of default [Dkt. #23] must be set aside.

But even if service upon Resmae had been sufficient and default had been properly entered, the plaintiffs would not be entitled to default judgment. A "defendant's default does not in itself warrant the court in entering a default judgment. . . . There must be a sufficient basis in the pleadings for the judgment entered." Bixler v. Foster, 596 F.3d 751, 762 (10th Cir. 2010) (quoting Nishimatsu Const. Co. v. Houston Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). Notwithstanding a defendant's default, "[t]he claimant must state a legally valid claim for relief," and "[a] court may grant judgment by default only for relief that may lawfully be granted on the well-pleaded facts alleged by the claimant." 10 James Wm. Moore et al., Moore's Federal Practice § 55.32(1)(b) (3d ed. 2014). Therefore, "it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law." Bixler, 596 F.3d at 762 (quoting 10A Charles Alan Wright, Arthur R. Miller, & Mary K. Kane, Federal Practice and Procedure § 2688, at 63 (3d ed. 1998)); see also Quirindongo Pacheco v. Rolon Morales, 953 F.2d 15, 16 (1st Cir. 1992) ("After an entry of default, a court may examine a plaintiff's complaint to determine whether it alleges a cause of action."); Cripps v. Life Ins. Co. of North America, 980 F.2d 1261, 1267 (9th Cir. 1992) ("[N]ecessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default.").

To state a legitimate cause of action, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (holding that a claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged"). A complaint that offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will notdo." Twombly, 550 U.S. at 555. Nor does a complaint suffice if it tenders "naked assertion[s]" devoid of "further factual enhancement." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). "Factual allegations must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 550 U.S. at 555 (citations omitted).

In their Complaint, the plaintiffs allege the defendants used "manufactured evidence of indebtedness" to extort from them property interests worth in excess of $500,000. [Dkt. #2, p. 3]. In support of this allegation, they state that the defendants falsely claimed to own a security interest in their property and mailed demands for payment to them every month for more than four years. [Id., pp. 7-23]. The plaintiffs bring their claim under 18 U.S.C. § 1964(c), which authorizes "[a]ny person injured in his business or property" as a result of racketeering activities prohibited in 18 U.S.C. § 1962 to bring suit to recover treble damages. [Id., p. 1].

But the plaintiffs fail to plead sufficient factual content to allow the court to draw a reasonable inference that the defendants caused them to suffer any injury. The plaintiffs repeatedly insist that they have suffered "tangible losses" to their "'property interests' or 'business interests' or 'business and property interests.'" [id., pp. 5-6, 23]. Yet they do not say what these interests are. Nor do they offer any allegations that plausibly show that the defendants' conduct deprived them of their property, or inflicted any harm upon them beyond the nuisance of unwanted mail. In the absence of such supporting allegations, the plaintiffs' claims that the defendants deprived them of property interests are merely conclusory allegations, which the court need not accept. Moffett v....