Lopez-Flores v. Resolution Trust Corp.

Decision Date20 April 2000
Docket NumberNo. 99-CV-73444.,99-CV-73444.
Citation93 F.Supp.2d 834
PartiesCrispulo LOPEZ-FLORES, Plaintiff, v. RESOLUTION TRUST CORPORATION, et al., Defendants.
CourtU.S. District Court — Eastern District of Michigan

Crispulo Lopez-Flores, Detroit, Michigan, pro se.

Angela J. Thorpe, Dallas, Texas, for Federal Deposit Insurance Corporation and Resolution Trust Corporation.

Paul M. Stoychoff, Troy, Michigan, for Franklin Credit Recovery Fund XXII, L.P.

ORDER

COOK, District Judge.

On July 12, 1999 the Plaintiff, Crispulo Lopez-Flores, acting without the benefit of counsel, initiated this lawsuit against the Defendants, Resolution Trust Corporation ("RTC,")1, et al., whom he contends, inter alia, improperly exercised their powers under 12 U.S.C. § 1821 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). In response, the RTC moved to dismiss this case for lack of subject matter jurisdiction, asserting that the Plaintiff had failed to exhaust all of his requisite administrative remedies. Alternatively, the RTC argued that the FIRREA prescribes that venue for this action should lie in Texas or Washington, DC, rather than in Michigan.2

On November 18, 1999 the Court heard the parties' arguments in connection with the instant motion. For the following reasons, the RTC's request is granted in part, and denied in part.

I

In 1986 the Plaintiff's son, Luis R. Lopez, obtained a thirty-year mortgage loan from the Mutual Building & Loan Association ("Mutual") in order to buy a parcel of real property in Texas.3 Less than three years later (to wit, January 1989), Luis Lopez informed Mutual that (1) his father would assume all responsibility for the payment of the mortgage, and (2) all future correspondence relating to the loan should be forwarded to the Plaintiff at his address in Detroit, Michigan.4

Thereafter, Mutual sought to obtain personal information from the Plaintiff in order to begin the process of officially including him on the mortgage papers. However, this process was not completed because in 1989 or 1990, Mutual filed for bankruptcy.5 As a result, the Plaintiff's name does not appear on the mortgage contract or upon any other official document relating to the property.6 Nonetheless, there is every indication from the pleadings that the Plaintiff has been "in charge of financial matters related" to the mortgage since February 6, 1989.7

The RTC was the first organization to assume control over Mutual's bankrupt operations, including its oversight responsibilities for the mortgage at issue. Later, an intermittent institution contracted with the RTC to manage the loan. Finally, in November 1994, the loan was transferred to another Defendant, the Franklin Credit Recovery Fund XXII L.P. ("Franklin Credit").8 Significantly, each of these financial institutions dealt directly with the Plaintiff — not Luis R. Lopez — on matters of payment.

In his Complaint, the Plaintiff contends that he has been injured by the transfer of the mortgage to Franklin Credit because (1) he was neither informed of his rights and responsibilities during the transfer nor given an opportunity to buy out the mortgage in violation of the procedures that had been established by and for the RTC, and (2) Franklin Credit is charging him with exorbitant sums and has failed to pay his property taxes and insurance out of an escrow account.9 Since November 1994, the Plaintiff has paid more than thirty-six thousand dollars ($36,000.00) to Franklin Credit.10 Now, he asks the Court to (1) nullify the transfer of the mortgage to Franklin Credit (and any subsequent transfers or sales), (2) credit him with the monies that he has paid, and (3) require the RTC to abide by its procedures, which among other things, would enable him as a low income debtor to exercise the right of first refusal to pay off the mortgage before the loan is transferred to a clearinghouse.

II

During the hearing on November 18, 1999, the Court expressed its concern about the Plaintiff's standing to litigate this matter.11 Standing is a fundamental issue that must be resolved before the Court grapples with the complex questions of statutory construction that surround the RTC's motion.12

"[T]he party invoking federal jurisdiction bears the burden of establishing its existence." Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 104, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (citing FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990)); see Cutshall v. Sundquist, 193 F.3d 466, 471 (6th Cir.1999). Where, as here, a question of standing arises in connection with a motion to dismiss under Federal Rule of Civil Procedure 12(b), the Court must base its decision on the pleadings and will "presume that the general allegations in the complaint encompass the specific facts necessary to support those allegations." Steel Co., 523 U.S. at 104, 118 S.Ct. 1003; see American Fed'n of Gov't Employees v. Clinton, 180 F.3d 727, 729 (6th Cir.1999) ("For purposes of ruling on a motion to dismiss for lack of standing, a complaint must be viewed in the light most favorable to the plaintiff; all material allegations of the complaint must be accepted as true."). Moreover, because the Plaintiff is without the benefit of counsel, the Court will read the Complaint in a more liberal manner than it would if an attorney had been responsible for the pleading. See, e.g., Hughes v. Rowe, 449 U.S. 5, 10, 101 S.Ct. 173, 66 L.Ed.2d 163 (1980); Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972). Indeed, "[t]he appropriate liberal construction requires active interpretation in some cases to construe a pro se [pleading] `to encompass any allegation stating federal relief.'" Franklin v. Rose, 765 F.2d 82, 85 (6th Cir.1985) (quoting White v. Wyrick, 530 F.2d 818, 819 (8th Cir.1976)) (discussing pro se petitions for writs of habeas corpus). Thus, this Complaint should not be dismissed for lack of standing unless it appears from an overall examination of the allegations therein that the Plaintiff could not have standing to assert any discernible, tenable federal claim.

A

The doctrine of standing has a constitutional, as well as a prudential, component. See Federal Election Comm'n v. Akins, 524 U.S. 11, 19-20, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998). The constitutional roots of this doctrine can be found in Article III, § 2, which grants jurisdiction to the federal courts to hear only "Cases" and "Controversies." See Clinton v. City of New York, 524 U.S. 417, 429, 118 S.Ct. 2091, 141 L.Ed.2d 393 (1998); Steel Co., 523 U.S. at 92, 118 S.Ct. 1003; Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984).13

In order to distinguish such appropriately resolvable matters from other disputes, the federal courts are obliged to ask two basic questions about the character of the lawsuit and the litigants. First, courts enquire whether the litigation more closely resembles a traditional lawsuit rather than a historically legislative or executive activity. See generally Akins, 524 U.S. at 23, 118 S.Ct. 1777 (generalized grievances are better suited to legislative, not judicial, processes). In this respect, the standing doctrine preserves a fundamental principle of American government — the separation of powers. See Steel Co., 523 U.S. at 102, 118 S.Ct. 1003 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 559-60, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). Second, even if the lawsuit does serve a proper judicial function, courts must "focus[] on whether the plaintiff is the proper party to bring this suit, although that inquiry `often turns on the nature and source of the claim asserted.'" Raines v. Byrd, 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) (quoting Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)); see Richard H. Fallon, Jr., Daniel J. Meltzer & David L. Shapiro, Hart & Wechsler's The Federal Courts and the Federal System 136 (4th ed. 1996) ("The Supreme Court has frequently stated that standing questions relate to parties — to the nature and sufficiency of the litigant's concern with the subject matter of the litigation — rather than to the fitness for adjudication of the legal issues tendered for decision.").

In order to provide a structure for these ethereal inquiries, the Supreme Court has stated that standing will be found when a plaintiff "allege[s] personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." Allen, 468 U.S. at 751, 104 S.Ct. 3315, quoted in Department of Commerce v. United States House of Representatives, 525 U.S. 316, 329, 119 S.Ct. 765, 142 L.Ed.2d 797 (1999). These are the elements of injury, causation, and redressability. See Cutshall, 193 F.3d at 471 ("This triad of injury in fact, causation, and redressability comprises the core of Article III's case-or-controversy requirement .... "). The elements should be interpreted in a manner that is consistent with the basic questions that they were meant to answer in order to ensure that the doctrine fulfills its underlying constitutional purpose.

Here, the Court is satisfied that the allegations are sufficient to withstand the motion to dismiss on the issues of whether (1) the RTC caused the harm about which the Plaintiff complains, and (2) the harm is, in some way, judicially redressable. See generally Steel Co., 523 U.S. at 103, 118 S.Ct. 1003. The most significant constitutional question is whether his alleged injury is of the type that supports a claim of standing.

The Plaintiff essentially asserts a claim under the Administrative Procedure Act ("APA"), 5 U.S.C. § 702,14 which provides that "[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof."15 His primary asserted injury is...

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2 cases
  • Village of Oakwood v. State Bank and Trust Co.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • 22 Agosto 2008
    ...not cover claims that arise after receivership from the independent acts of the governmental agency." Lopez-Flores v. Resolution Trust Corp., 93 F.Supp.2d 834, 849 (E.D.Mich.2000). But the court in Lopez-Flores relied on the fact that "by the time Lopez-Flores's claim had accrued, the ninet......
  • Village of Oakwood v. State Bank and Trust Co.
    • United States
    • U.S. District Court — Northern District of Ohio
    • 22 Octubre 2007
    ...as Homeland's arising from management actions of the RTC after taking over a depository institution."); Lopez-Flores v. Resolution Trust Corp., 93 F.Supp.2d 834, 849 (E.D.Mich.2000) (concluding "that the administrative process of § 1821 does not cover claims that arise after receivership fr......

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