Sandlin v. CitiMortgage, Inc.
| Decision Date | 01 March 2021 |
| Docket Number | No. 2:19-cv-02368-JTF-atc,2:19-cv-02368-JTF-atc |
| Parties | JESSE SANDLIN, Plaintiff, v. CITIMORTGAGE, INC., CENLAR, RICHARD KELLER, J. MATTHEW KROPLIN, Defendants. |
| Court | U.S. District Court — Western District of Tennessee |
Before the Court by order of reference1 is the Motion to Dismiss of Defendants CitiMortgage, Inc. ("CitiMortgage"), Cenlar FSB ("Cenlar"), Richard Keller, and Matthew Kroplin (collectively "Defendants"), filed June 26, 2019. (ECF No. 9.) Pro se Plaintiff Jesse Sandlin filed his response on November 8, 2019. (ECF No. 15.) Defendants filed their reply on November 22, 2019. (ECF No. 16.) On June 2, 2020, the Court granted Sandlin's Motion for Leave to File Sur-Reply (ECF No. 18), which included the sur-reply (ECF No. 18-1). (ECF No. 21.)2 For the following reasons, it is recommended that the Motion be granted in its entirety.
Sandlin and CitiMortgage are no strangers to litigation. This is the fourth lawsuit Sandlin has filed against the corporation in the state, district, and bankruptcy courts in this district. See Sandlin v. CitiMortgage, Inc., 2:09-cv-02294-JPM-cgc (W.D. Tenn.) ("Sandlin I"); Sandlin v. CitiMortgage, Inc., No. 2:14-cv-02513-STA-dkv, 2014 WL 7272402 (W.D. Tenn. Dec. 18, 2014), aff'g Adv. Proc. No. 13-00439 ) ("Sandlin II"); Sandlin v. Citibank, N.A., No. 2:15-cv-02768-JTF-dkv, 2018 WL 2370769 (W.D. Tenn. Mar. 26, 2018), aff'd, No. 18-5452 (6th Cir. Nov. 20, 2018) ("Sandlin III"). Sandlin filed the instant lawsuit on May 31, 2019 (the "Complaint"). (ECF No. 1-2.)3
This case involves a mortgage dispute between Sandlin and CitiMortgage wherein Sandlin claims that CitiMortgage improperly foreclosed on his property at 4743 Kassel Cove in Memphis, Tennessee. (See generally Compl.) In December 2000, Plaintiff purchased the property for approximately $132,000, with a loan backed by the U.S. Department of Veterans Affairs and the Federal Housing Administration. (Id. ¶ 15.) Though the record is not clear as to the timing, at some point, CitiMortgage became the servicer of the loan.
As the Court explained in Sandlin III, in 2012 (Sandlin I). 2018 WL 2370769, at *1 (citations omitted). That settlement ultimately culminated Sandlin III, No. 18-5452, at 2 (citations omitted).
Though Sandlin made the mortgage payments as they came due, he failed to pay county property taxes in 2012 or city and county property taxes in 2013. Sandlin III, 2018 WL 2370769, at *2 (citations omitted). This triggered the 2014 litigation known as Sandlin II:
After Sandlin failed to pay all of his local property taxes in 2012 and 2013, CitiMortgage transitioned his loan to include escrow and increased his monthly payment amount to account for funds it had applied to cover Sandlin's tax bill. In response, Sandlin filed an adversary proceeding in the bankruptcy court, challenging CitiMortgage's increase of his mortgage payment and its application of his payments to the delinquent tax bills. . . . The bankruptcy court . . . conclud[ed] that Sandlin failed to pay his local taxes and that CitiMortgage properly exercised its contractual right under the modified loan agreement to pay the delinquent taxes and seek repayment. Sandlin appealed to the district court, which affirmed the bankruptcy court's decision.
Sandlin III, No. 18-5452, at 2 (citations omitted).
"Throughout October 2013 to September 2014, Plaintiff failed to tender the amounts due under the loan on a number of occasions." Sandlin III, 2018 WL 2370769, at *2. "As a result of making only partial payments, Plaintiff fell behind on his mortgage and entered default." Id. Sandlin III, No. 18-5452, at 2.5 That action, Sandlin III, was removed to this Court, and the 2015 foreclosuresale was cancelled. 2018 WL 2370769, at *2 (citation omitted). Defendants Keller and Kroplin are attorneys who represented CitiMortgage in Sandlin III. .)
In Sandlin III, the Court first dismissed some of Sandlin's claims and ultimately granted a defense motion for summary judgment on the rest. No. 18-5452, at 3. The Sixth Circuit affirmed all those rulings in 2018. See generally id. Importantly, the Sixth Circuit held that "the record establishes that Sandlin defaulted on his loan." Id. at 6. As this Court found, 2018 WL 2370769, at *7 (citation omitted).
The instant lawsuit arises from efforts to recommence those foreclosure proceedings. As alleged by Sandlin in the Complaint, Cenlar became the servicer of the loan on April 1, 2019. (Compl. ¶ 17.) Sandlin alleges that, on April 12, 2019, Cenlar mailed him a loan statement indicating he had an outstanding principal of $134,666.61, a -$8,030.94 escrow balance, and an amount due of $39,422.50; that he was 1,472 days delinquent on his mortgage; and that $24,291.82 in credit had not been applied to his account. (Id. ¶ 18.) Sandlin subsequently spoke with several representatives from Cenlar before one ultimately told him that a foreclosure sale date was set for June 3, 2019. (Id. ¶ 26.) Cenlar then published four foreclosure notices claiming that Sandlin was in default of his mortgage and informed other third parties, including credit bureaus, of the default. (Id. ¶¶ 28, 32.) Sandlin alleges that he had continued making mortgage payments and was not in default on the loan. (Id. ¶¶ 31, 33-35.) Sandlin alleges that CitiMortgage and Cenlar failed to comply with federal regulations incorporated in the Deed of Trust. (Id. ¶¶ 36-37.) Sandlin also asserts that Keller and Kroplin engaged in constructive fraudbased on their court filings and representations to the court made on CitiMortgage's behalf in the earlier litigation. (Id. ¶¶ 39-45.)
Sandlin's Complaint seeks relief on ten separate grounds: (i) declaratory and injunctive relief; (ii) violation of the Fair Debt Collection Practices Act; (iii) negligence; (iv) unjust enrichment; (v) violation of the Tennessee Consumer Protection Act ("TCPA"); (vi) wrongful foreclosure; (vii) wantonness; (viii) slander of title; (ix) breach of contract; and (x) intentional infliction of emotion distress. (See id. ¶¶ 46-105.)
The Motion states three grounds for dismissing the Complaint's various claims: res judicata, the litigation privilege, and failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Defendants assert that, because Plaintiff's claims that he was not in default and that Defendants had no right to foreclose have been previously rejected, they are barred by the doctrine of res judicata. (MTD 10.) Defendants further state that all allegations against Keller and Kroplin arise from their actions representing CitiMortgage and are absolutely barred by Tennessee's litigation privilege. (Id. at 10-11.) Finally, Defendants assert that the substantive counts fail to state claims for which relief may be granted. (Id. at 14-29.)
As a threshold matter, this Court must determine whether jurisdiction is proper before it. Defendants removed the case to this Court based on its federal question jurisdiction, 28 U.S.C. § 1331, as Plaintiff invokes the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. ("FDCPA"). Defendants also assert that jurisdiction is proper under 28 U.S.C. § 1332, based on the parties' complete diversity and the amount in controversy exceeding $75,000. Though Sandlin and Kroplin are both residents of Tennessee, Defendants assert jurisdiction isnevertheless proper under § 1332 because Kroplin was fraudulently joined, arguing that Sandlin lacks "'at least a colorable cause of action' under state law against" him. (ECF No. 1, at ¶ 19 (quoting Garner v. SDH Servs. E., LLC, 55 F. Supp. 3d 1016, 1021 (M.D. Tenn. 2014).)
Here, the question of fraudulent joinder is immaterial, as the alleged violations of the FDCPA in Count Two of the Complaint establish that a substantial federal question exists, making this Court's jurisdiction proper under § 1331. See Brown v. Hosto & Buchan, PLLC, 748 F. Supp. 2d 847, 851 (W.D. Tenn. 2010) (); see also United States v. Goforth, 465 F.3d 730, 733 (6th Cir. 2006) ().6 The Court's jurisdiction extends to Sandlin's state-law claims under 28 U.S.C. § 1367, as the claims derive from a "common nucleus of operative fact." Baxter Bailey & Assocs., Inc. v. Powers & Stinson, Inc., No. 2:14-cv-03012-SHM-dkv, 2015 WL 12867931, at *1 (W.D. Tenn. Apr. 8, 2015) (citing 28 U.S.C. § 1367).
To determine whether Sandlin's Complaint states a claim on which relief may be granted, the Court applies the standards under Federal Rule of Civil...
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