McZeal v. Midsouth Nat'l Bank
| Decision Date | 13 January 2017 |
| Docket Number | CIVIL ACTION NO. 2:15 -CV-02315 |
| Parties | ALFRED MCZEAL v. MIDSOUTH NATIONAL BANK, NA |
| Court | U.S. District Court — Western District of Louisiana |
Before the court are several motions filed by the parties:
For the following reasons the court will GRANT the defendants' Motion for the Court to Take Judicial Notice (Rec. Doc. 57), DENY the plaintiff's Motion to Strike (Rec. Doc. 63), and GRANT the defendants' Second Motion for the Court to Take Judicial Notice (Rec. Doc. 66). The court will also GRANT the defendants' Motion to Dismiss (Rec. Doc. 56) and DISMISS WITH PREJUDICE the plaintiff's second amended complaint. Finally the court will ORDER the plaintiff to SHOW CAUSE why he should not be sanctioned and refer that issue to the Magistrate Judge for further proceedings.
The present case was transferred from the United States District Court for the Central District of California based on improper venue.1 After transfer, this court denied the defendants' motion to take judicial notice of other judicial proceedings and motion to dismiss.2 The court also denied McZeal's motion to strike and motion for judgment on the pleadings, while ordering the plaintiff to amend his complaint.3 The court ordered the plaintiff to amend his complaint because he failed to state factual allegations that supported his legal conclusions.4 The plaintiff submitted an amended complaint on September 12, 2016.5 This amended complaint is forty-seven pages with a twenty-eight page attachment that repeats the claims made in the complaint. Judge Duval's description of another complaint filed by McZeal, Jr. in a different case in the Eastern District of Louisiana accurately describes the contents the amended complaint before the court— McZeal v. J.P. Morgan Chase Bank, NA, No. CIV.A. 13-6754, 2014 WL 3166715, at *7 (E.D. La. July 7, 2014).
The claims in the amended complaint stem from a foreclosure on a commercial property located at 2007 Moeling Street, Lake Charles, Louisiana. The amended complaint is virtually devoid of factual details regarding the foreclosure. The court has pieced together the followingtimeline of events based on court documents submitted by the defendants and a bankruptcy proceeding filed in the Western District of Louisiana by McZeal, Jr.'s father.6
On June 9, 2004,7 Alfred McZeal, Sr., the plaintiff's father, borrowed $50,288.00 from MidSouth National Bank, NA (MidSouth) and secured $50,000 of the loan with a multiple indebtedness mortgage on the commercial property.8 The mortgage was recorded with the Calcasieu Parish Clerk of Court.9 On August 30, 2004, McZeal, Sr. transferred the property to a family trust10 and Alfred McZeal, Jr. was named as the trustee and a beneficiary of the trust.11 However the trust apparently was not recorded prior to filing for bankruptcy.12 At some point thereafter, McZeal, Sr. went into default on his MidSouth loan.13
On July 20, 2009, McZeal, Sr. filed for Chapter 7 bankruptcy in the Western District of Louisiana.14 The debtor was discharged on November 16, 2009. On November 24, 2009, MidSouth petitioned the 14th Judicial District Court of Calcasieu Parish for a Writ of Seizure and Sale, directing the Sheriff to seize and sell the mortgaged property, without appraisal tosatisfy the outstanding debt of over $40,000.15 The state district court granted the petition and ordered that a Writ of Seizure and Sale be issued without appraisement and without the 3-day demand for payment delay.16 On March 5, 2010, MidSouth filed a Motion for Relief from Stay and to Compel Abandonment of Property.17 McZeal, Sr., objected18 arguing that another creditor had superior rights to the property.19 In his amended complaint, the plaintiff contends that he had a superior lien on the commercial property,20 which was likely the superior interest that was mentioned by McZeal, Sr. in his objections.
The Bankruptcy Court granted MidSouth's motion.21 On April 16, 2010, the Bankruptcy Court specifically ordered that MidSouth could continue its state court foreclosure proceedings on the Moeling Street property because the bankruptcy estate abandoned the property.22 On October 13, 2010, the Calcasieu Parish sheriff sold the property to MidSouth for $726.75.23 MidSouth recorded the sale on November 3, 2010.24 McZeal, Sr.'s bankruptcy discharge ultimately was revoked in November 2011 after the court discovered that he fraudulentlytransferred property to his son in violation of the bankruptcy stay.25 McZeal, Sr. passed away on September 25, 2015.
Plaintiff alleges in his amended complaint that MidSouth's foreclosure was improper because it allowed MidSouth to seize the commercial property to satisfy about $40,000 worth of debt, when McZeal, Jr. (without explaining how or with what basis) appraised the property's value at $400,000. He also alleges that the bank did not follow the correct procedures under Louisiana law.26 The plaintiff generally alleges that, between 2009 and 2016, the defendants carried out "an illegal scheme to steal personal and business property, without due process of law, and under the guise of lawful means."27 McZeal, Jr. lists seven actions allegedly committed by MidSouth that he contends were fraudulent: (1) misrepresenting his lien status; (2) filing misleading documents in a bankruptcy case; (3) stating it was a secured creditor in a bankruptcy case; (4) stating that it had rights over the commercial property; (5) conspiring with the bankruptcy trustee; (6) making false representations over a telecommunications network; and (7) making false representations in the public record regarding its ownership status.28 The plaintiff alleges that the bankruptcy trustee conspired with MidSouth to seize the entire commercial property, even though MidSouth was only entitled to a fraction of the value. The plaintiff does not further explain what MidSouth and its representatives actually did that constituted fraud.
Based on these allegations, the plaintiff pleaded fifteen claims29 and asks for $23,780,000 from each defendant.30 All of the allegations are legal conclusions with nonexistent or minimalfactual support. McZeal, Jr. essentially uses seventy-five pages to say over and over again that the property was fraudulently seized without explaining the factual basis of the fraud. He attempts to comply with specific pleading standard in some portions of the complaint by detailing who, when, and where the fraud occurred but, when he explains what the fraud was, he continues to characterize the specific acts as "acts of fraud"31 or "fraudulent acts."32 The closest statement of specific acts of fraud is that MidSouth committed fraud by representing that it owned the Moeling Street property and had the right to enter and take possession of the property.33
After the plaintiff filed his amended complaint, the defendants again moved for the court to take judicial notice of other court proceedings and to dismiss the case. The defendants argue that the court should take judicial notice of the prior proceedings because the prior proceedings show that the current claims are barred and the submitted documents also rebut some of the plaintiff's convoluted contentions. The defendants argue that the plaintiff's complaint should be dismissed because (1) the court does not have jurisdiction to overturn a state court judgment under the Rooker-Feldman doctrine, (2) the claims are precluded under res judicata, and (3) each claim fails to state a claim for relief under Federal Rules of Civil Procedure 8, 9(a), and 12(b)(6). The plaintiff countered with a Motion to Strike.
McZeal, Jr. moves to strike the defendants' Motion for the Court to Take Judicial Notice and Motion to Dismiss claiming that he was not served.34 McZeal, Jr. asserts that he received the twenty-five exhibits attached to the Motion for the Court to Take Judicial Notice, but he did not receive the motion itself.35 McZeal, Jr. also claims that he never received an actual copy of the Motion to Dismiss.36 The plaintiff timely responded to both motions allegedly because he framed his response on the title of the motions.37 McZeal, Jr. also attached a declaration in which he stated that he did not receive the motion.38 However, attached to both the first Motion for the Court to Take Judicial Notice39 and Motion to Dismiss40 is a Proof of Service, which was signed by counsel for the defendants. In the Proofs of Service, the defendants' counsel signed under penalty of perjury that she mailed a copy of the motion to the defendant. Additionally, in the defendants' response to McZeal, Jr.'s Motion to Strike, the defendants include an affidavit that was signed under penalty of perjury.41 In the affidavit, the defendants' counsel describes in great detail how she mailed the motions to McZeal, Jr. at the address he provided.
Under Federal Rule of Civil Procedure 5(b)(2)(C), a motion is considered served when it is "mail[ed] to the person's last known address."...
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