Segelstrom v. Citibank, N.A.

• Decision Date: 21 November 2014
• Docket Number: Civil Action No. 14–1071 CKK
• Citation: 76 F.Supp.3d 1
• Court: U.S. District Court — District of Columbia
• Parties: Erik Segelstrom, et al., Plaintiffs, v. Citibank, N.A., et al, Defendants.

76 F.Supp.3d 1

Erik Segelstrom, et al., Plaintiffs

v.Citibank, N.A., et al, Defendants.

Civil Action No. 14–1071 CKK

United States District Court, District of Columbia.

Signed (November 21, 2014)

Erik Segelstrom, Point Arena, CA, pro se.

Cathie M. Hamer, Point Arena, CA, pro se.

Tessa Laspia Frederick, Miles & Stockbridge, Baltimore, MD, Billy B. Ruhling, II, Troutman Sanders LLP, Tysons Corner, VA, Haig Vahan Kalbian, D. Michelle Douglas, Kalbian Hagerty LLP, Mary E. Pivec, Williams Mullen, Washington, DC, for Defendant.

MEMORANDUM OPINION

COLLEEN KOLLAR–KOTELLY, United States District Judge

Plaintiffs Erik Segelstrom and Cathie Hamer, who are proceeding pro se, filed this lawsuit against five “Doe” defendants and seven named defendants—Citibank N.A. (“Citibank”), Nationstar Mortgage LLC (“Nationstar”), Sheriff Thomas Allman, in his personal and private capacity, and the Mendicino County Sheriff's Department (collectively the “Law Enforcement Defendants”), and TFLG A Law Corporation, Eric G. Fernandez, and Viana G. Barbu¹ (collectively the “Law Firm Defendants”). Plaintiffs challenge the foreclosure of Plaintiffs' California property and the related unlawful detainer proceeding. Plaintiffs also allege intentional infliction of emotion distress and numerous claims under the False Claims Act, 31 U.S.C. § 3729 et seq. Presently before the Court are motions by several Defendants for dismissal of this lawsuit as well as Plaintiffs' Motion for Preliminary Injunction and Temporary Restraining Order and Motion to Amend the Complaint. Upon consideration of the pleadings,² the relevant legal authorities, and the record as a whole, the Court issues the following rulings. The Court GRANTS Plaintiffs' Motion to Amend the Complaint. The Court further GRANTS the motions to dismiss of Defendants Citibank, Nationstar, the Law Enforcement Defendants, and the Law Firm Defendants. In light of the decision on Defendants' motions to dismiss, Plaintiffs' Motion for Preliminary Injunction and Temporary Restraining Order is DENIED AS MOOT. The Court shall not address Plaintiffs' Motion for Preliminary Injunction in this Memorandum Opinion, but only Defendants' Motions to Dismiss.

I. BACKGROUND

Before proceeding to the facts of this case, the Court shall address Plaintiffs' Motion to Amend the Complaint. Plaintiffs properly filed a Motion to Amend the Complaint on October 14, 2014.³ Plaintiffs' proposed Amended Complaint contained few substantive changes. Rather, the primary change was a three-page summary of Plaintiffs' claims added to the beginning of the Complaint in an attempt to clarify the exact nature of Plaintiffs' claims per the Court's instructions in its August 21, 2014, Order. See Order (Aug. 21, 2014), ECF No. [15]. The Court ordered Defendants to file a Notice with the Court indicating any objections to Plaintiffs' Amended Complaint and indicating whether their motions to dismiss—which had all been filed prior to Plaintiffs properly filing their Motion to Amend THE Complaint—were still applicable to the Amended Complaint in the event the Court were to grant Plaintiffs leave to amend their Complaint. See Order (Oct. 2, 2014), ECF No. [43]. Defendants indicate that they oppose Plaintiffs' Amended Complaint because it merely restates the same facts as the original Complaint in different terms, but affirm that all of their arguments in their respective motions to dismiss remain applicable. In light of the attempt at clarifying Plaintiffs' claims included at the beginning of Plaintiffs' Amended Complaint, the non-substantive nature of the changes in Plaintiffs' Amended Complaint, and the fact that Defendants' motions to dismiss apply with equal force to the Amended Complaint, the Court shall GRANT Plaintiffs leave to file their Amended Complaint.

A. Factual Background

For the purposes of these motions to dismiss, the Court accepts as true the well-pleaded allegations in Plaintiffs' Amended Complaint. The Court has been able to discern the following facts from Plaintiffs' lengthy and often rambling Amended Complaint.

Plaintiffs' claims arise out of a July 15, 2004, mortgage transaction with Lehman Brothers Bank FSB, evidenced by a promissory note (“the Note”) in the amount of $520,000 (“the Loan”), and secured by a Deed of Trust placing a lien on certain real property located at 29850 Ten Mile Road, Point Arena, California 95468 (“the Property”). Am. Compl. ¶ 14. The mortgage servicer for Plaintiffs' Loan at the time the Loan was originally made was Aurora Loan Services. Id. ¶ 13. The Mortgage and Note were securitized and sold to a REMIC known as Structured Asset Securities Corporation Mortgage Loan Trust 2005–2XS. Id. ¶ 1. Plaintiffs allege that Citibank, NA is the Securities Administrator for the REMIC. Id. ¶¶ 1, 4. In June of 2012, Lehman Brothers sold the assets of Aurora Bank, FSB and Aurora Loan Servicing to Nationstar Mortgage LLC. Id. ¶ 4. The Mortgage Electronic Registration System (“MERS”) assigned Plaintiffs' note and Deed of Trust to Nationstar on December 11, 2012. Id. ¶¶ 11, 12, Ex. B (Assignment of Deed of Trust). Nationstar began servicing Plaintiffs' Loan. Id. ¶ 4.

Plaintiffs defaulted on their obligation to repay the Loan in or around October 2013.See Id. at Ex. E (Notice of Default). Plaintiffs do not contest that they defaulted on their Loan and owe money. Plaintiffs received a Notice of Default from Nationstar on or around October 17, 2013. Id. Plaintiffs allege that Citibank is using Nationstar as their proxy and agent with respect to the foreclosure and eviction. Id. ¶ 62. Plaintiffs' property was sold to Nationstar in a non-judicial foreclosure sale on or around February 14, 2014.⁴ Id. ¶ 39, Ex. F (Notice of Trustee's Sale); Nationstar MTD at 2.

On March 28, 2014, Nationstar filed an unlawful detainer proceeding against Plaintiffs in California state court. Am. Compl. ¶ 94, Ex. F* (Unlawful Detainer Compl.).⁵ TFLG A Law Corporation represented Nationstar in the unlawful detainer proceeding. Id. ¶ 58, Ex. F* (Unlawful Detainer Compl.). Judgment was entered against Plaintiffs Segelstrom and Hamer on August 8, 2014, and a writ of possession was issued on August 29, 2014. See Notice of Related Case, ECF No. [22], Ex. B (Unlawful Detainer Judgment). Plaintiffs allege that Mendocino County Sheriff Thomas Allman and the Mendocino County Sheriff's Department are acting as agents for Nationstar in Nationstar's efforts to foreclose on and evict Plaintiffs from their home. Am. Compl. ¶ 4. The Mendocino County Sheriff's Department has indicated that they “intend to await a ruling from this Court on the TRO motion before enforcing the Writ [of possession].” Notice of Related Case, at 2.

B. Procedural History

Plaintiffs filed suit in this Court on June 25, 2014, against Citibank, Nationstar, and the Law Firm and Law Enforcement Defendants challenging the foreclosure and eviction proceedings with regards to their property and bringing several claims under the False Claims Act. Defendant Nationstar and the Law Firm Defendants filed motions to dismiss on August 4, 2014. On August 8, 2014, Plaintiff Segelstrom filed a voluntary petition for bankruptcy in the United States Bankruptcy Court for the Northern District of California. See Suggestion of Bankruptcy, ECF No. [11]. Shortly thereafter, Plaintiffs filed a Motion for Preliminary Injunction or Temporary Restraining Order in this Court. In light of Plaintiff Segelstrom's pending voluntary petition for bankruptcy, the Court stayed this case as to Plaintiff Segelstrom until resolution of Plaintiff Segelstrom's bankruptcy matter, or until Plaintiff Segelstrom withdrew his bankruptcy petition. See Order (Aug. 21, 2014), ECF No. [14]. However, as Plaintiff Hamer was not included in the petition for bankruptcy, the Court set a briefing scheduling for Plaintiff Hamer to respond to Defendants' motions to dismiss and to further brief Plaintiffs' Motion for Preliminary Injunction and Temporary Restraining Order.

The Law Enforcement Defendants filed a Motion to Dismiss on August 28, 2014. On September 3, 2014, the Court lifted the stay in this matter as to Plaintiff Segelstrom upon learning that Plaintiff Segelstrom's bankruptcy petition in the U.S. Bankruptcy Court of the Northern District of California had recently been dismissed. See Order (Sept. 3, 2014), ECF No. [23]. The Court set a briefing schedule for Plaintiff Segelstrom to respond to Defendants' motions to dismiss and to further brief Plaintiffs' Motion for Preliminary Injunction and Temporary Restraining Order. The Court put Plaintiffs on notice “that the resolution of their Motion for Preliminary Injunction and Motion for Temporary Restraining Order [would] be delayed because of the stay that the Court was required to impose.”Id. at 3. The Court found that “[a]s only one property is at issue in which both Plaintiffs have an interest, ... it [would] have a more complete record on which to rule if it wait[ed] for both Plaintiffs to complete their briefing of their Motion and resolve[d] the Plaintiffs' Motion for Preliminary Injunction and Motion for Temporary Restraining Order in one order addressing both parties' arguments. Id.

Defendant Citibank filed a Motion to Dismiss on September 29, 2014. On October 14, 2014, Plaintiffs properly filed a Motion for Leave to file an Amended Complaint. As discussed above, while certain Defendants opposed Plaintiffs' Motion to Amend Complaint, all Defendants indicated that the motions to dismiss they filed prior to Plaintiffs filing their Amended Complaint still applied fully to Plaintiffs' Amended Complaint.

As all motions have now been fully briefed, this matter is ripe for the Court's review. In short, the Law Firm Defendants seek to dismiss Plaintiffs' Amended Complaint arguing that this Court lacks personal jurisdiction over them and that Plaintiffs have not stated any claim against them. Similarly, the Law Enforcement Defendants seek to dismiss Plaintiffs' Amended Complaint on the basis of...