Swanson v. Wilford

Decision Date30 August 2019
Docket NumberFile No. 19-cv-117 (DWF/LIB)
PartiesChristopher Swanson, Plaintiff, v. Wilford, Geske, & Cook, et al., Defendants.
CourtU.S. District Court — District of Minnesota
ORDER AND REPORT AND RECOMMENDATION

This matter comes before the undersigned United States Magistrate Judge upon Defendant Wilford, Geske, & Cook's Motion to Dismiss, [Docket No. 26]; Defendants Caliber Home Loans, Inc. and Mortgage Electronic Registration Systems, Inc.'s Motion to Dismiss, [Docket No. 31]; Defendant Rubicon Mortgage Advisors, LLC's Motion to Dismiss, [Docket No. 44]; Plaintiff's Motion to Compel Arbitration, [Docket No. 51]; Defendants Caliber Home Loans, Inc. and Mortgage Electronic Registration Systems, Inc.'s Motion to Vacate Arbitration Award, [Docket No. 62]; Defendant Rubicon Mortgage Advisors, LLC's Motion to Vacate Arbitration Award, [Docket No. 70]; Defendants Caliber Home Loans, Inc. and Mortgage Electronic Registration Systems, Inc.'s Motion for Sanctions Against Plaintiff, [Docket No. 74]; and Plaintiff's Motion for Imposition of Automatic Stay. [Docket No. 81]. The parties' Motions were referred to the undersigned by the Honorable Donovan W. Frank. (Order of Reference [Docket No. 6]).

For the reasons discussed herein, Defendants Caliber Home Loans, Inc. (hereinafter "Defendant Caliber") and Mortgage Electronic Registration Systems, Inc.'s (hereinafter "Defendant MERS") Motion for Sanctions Against Plaintiff, [Docket No. 74], is DENIED, and Plaintiff's Motion for Imposition of Automatic Stay, [Docket No. 81], is DENIED as moot.

Additionally, the Court RECOMMENDS that Defendant Wilford, Geske, & Cook's Motion to Dismiss, [Docket No. 26], be GRANTED; Defendants Caliber Home Loans, Inc. and Mortgage Electronic Registration Systems, Inc.'s Motion to Dismiss, [Docket No. 31], be GRANTED; Defendant Rubicon Mortgage Advisors, LLC's Motion to Dismiss, [Docket No. 44], be GRANTED; Plaintiff's Motion to Compel Arbitration, [Docket No. 51], be DENIED as moot; Defendants Caliber Home Loans, Inc. and Mortgage Electronic Registration Systems, Inc.'s Motion to Vacate Arbitration Award, [Docket No. 62], be GRANTED; and Defendant Rubicon Mortgage Advisors, LLC's Motion to Vacate Arbitration Award, [Docket No. 70], be GRANTED.

I. Background

Plaintiff initiated the present action on January 15, 2019, by filing his Complaint. [Docket No. 1]. Plaintiff named as Defendants "Wilford, Geske, & Cook, attorneys for the defendant"; Caliber Home Loans, Inc; Rubicon Mortgage Advisors, LLC; and Mortgage Electronic Registration Systems, Inc. (hereinafter collectively "Defendants").

In his Complaint, Plaintiff makes the following assertions:1

7. The foreclosing party2 cannot verify they had legal authority to execute the power of sale clause in the deed of trust/promissory note.
8. The foreclosing party has no witness to attest to the dispute.
9. Defendant's3 name is not signed on the contract in dispute.
10. The defendant failed to obtain the proper, legal valid assignment of mortgage and power of sale.
11. The law is clear, however, entities foreclosing upon homeowners must strictly comply with State statutory prerequisites to foreclosure.
12. It is the black letter of the law that an entity seeking to foreclose must have the actual legal authority to exercise the power of sale.
13. The current foreclosure process has become an undisciplined and lawless rush to seize homes without a witness, the contract or an accounting of the money trail.
14. There is no language in the contract granting the "Agreement for Signing Authority" to execute the power of sale clause.

(Compl., [Docket No. 1], at 5).

The "Notice of Mortgage Foreclosure Sale" Plaintiff filed as an attachment to his Complaint, indicates that on March 23, 2017, Plaintiff along with his wife and another husband and wife pair took out a mortgage in the amount of $389,500.00 to secure the purchase of a property at "1108 W Summerwood Trl, Dilworth, MN 56529-1546." (Notice of Mortgage Foreclosure Sale [Docket No. 1-1]). The mortgagee on that mortgage, at the time it originated, was "Mortgage Electronic Registration Systems, Inc., as nominee for Rubicon Mortgage Advisors, LLC, . . . ." (Id.). That mortgage was then assigned to Caliber Home Loans, Inc. on July 17, 2018. (Id.). After that mortgage went into arrears and default, Plaintiff was provided notice of said a foreclosure sale. (Id.).4

In his "Request for Relief Plaintiff asserts as follows:

Plaintiff will suffer "irreparable injury" so the Judge must stop the eviction, vacate the foreclosure judgment, and any proceedings immediately. The foreclosing parties accounting records mentioned in the restraining order will verify the foreclosing party is in violation of Federal money laundering, and wire fraud statutes. The law is clear, entities foreclosing upon homeowners must strictly comply with State and Federal statutory prerequisites to foreclosure. The homeowners demands his day in court to address the illegal and unethical misconduct that started at signing. The homeowner demands the foreclosure sale, and the eviction action be vacated with prejudice because the fatal defects cannot be cured without obstruction the administration of justice. The defect should have to be filed at the start of the case to provide the court with jurisdiction. The homeowner requests 3 times the fraudulent foreclosure claim in reparation.

(Id.).

Based on his assertions Plaintiff ostensibly raises the following causes of action: a claim for violation of federal wire fraud laws, a claim for violations of the Fair Debt Collection Practices Act (hereinafter "FDCPA"), a claim for violations of the Truth in Lending Act, a claim for violations of the Real Estate Settlement Procedures Act, and a claim for violations of certain Minnesota Statutes. (See, Id.; Plf.'s Mot. for TRO, [Docket No. 2], at 5-11).5

Contemporaneous with his Complaint, Plaintiff filed a Motion for Temporary Restraining Order. (See, Plf.'s Mot. [Docket No. 2]). After Judge Frank referred Plaintiff's Motion for a Temporary Restraining Order to the undersigned, on January 29, 2019, the undersigned entered a Report and Recommendation recommending Plaintiff's Motion for Temporary Restraining Order be denied. (Report and Recommendation [Docket No. 11]). On February 21, 2019, Judge Frank adopted the undersigned's report and recommendation and denied Plaintiff's Motion for Temporary Restraining Order. (Order [Docket No. 39]).

Defendants each responded to Plaintiff's Complaint with a Motion to Dismiss. (Motions to Dismiss [Docket Nos. 26, 31, 44]). The Court previously established briefing schedules for each of these Motions to Dismiss. (Orders [Docket Nos. 40, 50).

Thereafter, Plaintiff filed his Motion to Compel Arbitration. [Docket No. 51]. Plaintiff's Motion to Compel Arbitration seeks an Order of this Court requiring the parties to participate in arbitration proceedings and to stay proceedings in this Court during the pendency of that arbitration. (See, Plf.'s Mot. to Compel Arbitration [Docket No. 51]).

On May 9, 2019, Plaintiff filed a "Notice of Registration of Foreign Final Judgment/Arbitration Pursuant to [28 U.S.C. § 1963]." (Plf.'s Notice [Docket No. 68]) (bracketsin original). Plaintiff's Notice indicated that a "foreign final judgment via arbitration award on the merits" had been "issued by HMP Dispute Resolution Arbitration." (Id.). Plaintiff attached to that Notice a document he entitled an "Arbitration Award." (Arbitration Award [Docket No. 68-1]). The Notice and purported Arbitration Award appear to involve only Defendants Caliber, MERS, and Rubicon. (See, Id.).

Defendants Caliber, MERS, and Rubicon subsequently moved to vacate the purported Arbitration Award. (Defs.' Mots. [Docket Nos. 62, 70]). The Court thereafter established briefing schedules on the parties newly filed Motions. (Order [Docket No. 69]).

After the Court established said briefing schedule, Defendants Caliber and MERS filed their Motion for Sanctions Against Plaintiff. [Docket No. 74]. Thereafter, the Court established yet another briefing schedule, and it informed the parties that it would not accept or entertain any further motions until the then-currently pending Motions were ruled upon. (Order [Docket No. 80]).

Subsequently, Plaintiff filed a "Notice of Bankruptcy and Motion for Imposition of Automatic Stay." [Docket No. 81].

II. Plaintiff's Motion for Imposition of Automatic Stay. [Docket No. 81].

Plaintiff's "Notice of Bankruptcy and Motion for Imposition of Automatic Stay," [Docket No. 81], purports to serve two purposes. First, the filing is intended to inform this Court that Plaintiff claims to have "filed for protection under the US Bankruptcy Court," and therefore, according to Plaintiff, the dispute underlying the present action "properly belongs in the US District Court of Minnesota, Bankruptcy Division." (Id.). Second, Plaintiff's filing "requests that this Court stay any further proceedings and defer the subject matter of these proceedings to the US Bankruptcy Court." (Id.).

The Court has independently verified that Plaintiff did file a Chapter 13 voluntary petition for bankruptcy on May 20, 2019. In re Christopher Lee Swanson, No. 19-BKY-60302, Petition (Bankr. D. Minn. May 20, 2019). Plaintiff's Petition included Defendant Caliber as a creditor. Id.

However, on July 15, 2019, the Honorable Michael E. Ridgway, United States Bankruptcy Judge for the United States Bankruptcy Court, District of Minnesota, dismissed Plaintiff's Petition for bankruptcy. In re Christopher Lee Swanson, No. 19-BKY-60302, Order (Bankr. D. Minn. July 15, 2019). Judge Ridgway reasoned that Plaintiff was "not eligible for relief pursuant to 11 U.S.C. section 109(h)" because he had "not received credit counseling with the statutorily required time period." Id. On August 9, 2019, the Trustee assigned to Plaintiff's Petition filed his "Final Report and Account" again acknowledging that the Petition had been dismissed on July 15, 2019,...

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