Thomas v. Bank of Am.

• Decision Date: 09 September 2022
• Docket Number: Civil Action 21-3242 (TJK)
• Parties: DARRYL THOMAS et al., Plaintiffs, v. BANK OF AMERICA et al., Defendants.
• Court: U.S. District Court — District of Columbia

DARRYL THOMAS et al., Plaintiffs, v. BANK OF AMERICA et al., Defendants.

Civil Action No. 21-3242 (TJK)

United States District Court, District of Columbia

September 9, 2022

MEMORANDUM OPINION

TIMOTHY J. KELLY, United States District Judge

Darryl Thomas sued Defendants-a group of banks and loan servicers-in the District of Columbia Superior Court on behalf of himself and his wife's estate, for allegedly fraudulently pursuing foreclosure of his property. He argues that Defendants conspired to misrepresent the ownership of the property and pursue unlawful foreclosure proceedings in that court. And he seeks an injunction to halt foreclosure of his property and damages for alleged violations of federal loan regulations and other common law torts. Defendants removed the case to this Court. Defendants moved to dismiss, arguing among other things, that Thomas's claims are precluded by a Superior Court decision in the foreclosure action. Thomas opposed, and moved to remand. For the reasons explained below, the Court agrees that removal was proper and that Thomas's claims are precluded, so it will deny Thomas's motion and grant Defendants' motions on those grounds.

I. Background

Thomas, suing on behalf of himself and as a representative of his wife's estate, alleges that Defendants conspired to defraud him and unlawfully foreclose on his property.^[1] The alleged scheme is complex, and his 130-page complaint is hard to follow. In short, Thomas claims that after obtaining a loan to buy the property, the lender-Bank of America-conspired with other financial institutions to unlawfully create the “illusion” that title in the property had been transferred to a “nonexistent trust entity.” ECF No. 1-4 ¶¶ 9, 14, 16, 18, 43-45. In doing so, Defendants allegedly falsified records and documents, made intentional misrepresentations, and fabricated evidence and testimony. See, e.g., id. ¶ 182. Thomas alleges that Defendants did all this to obtain loan payments fraudulently and eventually “weaponize” the foreclosure process to seize his property. Id. ¶¶ 8, 15, 80-83. He alleges that the scheme has been referred to as a “securitization fail.” Id. ¶ 8.

In 2015, U.S. Bank National (which possessed title to the property then through a trust called “Truman”), initiated foreclosure proceedings in Superior Court after Thomas supposedly failed to make required loan payments. See ECF No. 1-5 at 15. Thomas filed various counterclaims based on the same facts he alleges here-mainly, that U.S. Bank National was part of a conspiracy to unlawfully seize his property because Defendants misrepresented that title had been transferred to entities other than the original lender. Id. at 18-21. In 2018, a judge in Superior Court entered an Order and Decree of Sale in favor of U.S. Bank National, which approved the foreclosure and rejected all of Thomas's counterclaims. Id. at 22. Thomas's subsequent bankruptcy filings and the COVID-19 foreclosure moratorium-which have both since concluded- then halted any sale of his property.

In December 2021, Thomas sued prior and current title owners-Bank of America and its subsidiary Bank of America Funding Corporation, U.S. Bank National, J.P. Morgan Mortgage Acquisition Corporation, and U.S. Bank Trust National Association-and prior and current loan servicers-Rushmore Loan Management Services and Fay Servicing-in Superior Court. He sought to enjoin the foreclosure judgment and obtain damages related to violations of various lending laws. Defendants removed the case to this Court and moved to dismiss, arguing that the Thomas's claims are barred by claim preclusion and that he failed to state a claim. ECF Nos. 3, 8, 9, 10. Thomas opposed and moved to remand. ECF Nos. 18, 23.

II. Legal Standards

“A civil action filed in state court may only be removed to a United States district court if the case could originally have been brought in federal court.” Nat'l Consumers League v. Flowers Bakeries, LLC, 36 F.Supp.3d 26, 30 (D.D.C. 2014) (citing 28 U.S.C. § 1441(a)). “When a plaintiff files a motion to remand, the removing defendant bears the burden of proving that removal was proper.” Arenivar v. Manganaro Midatlantic, LLC, 317 F.Supp.3d 362, 367 (D.D.C. 2018) (internal quotation marks omitted). In resolving a motion to remand, the Court may consider “evidence outside the pleadings.” Id.

When considering a motion to dismiss under Rule 12(b)(6), the Court must “accept all of the factual allegations in [the] complaint as true.” Jerome Stevens Pharm., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005) (quoting United States v. Gaubert, 499 U.S. 315, 327 (1991)). The complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). But the Court need not accept legal conclusions as true. Id. at 679. The Court may consider the pleadings and any attachments to the motion referenced in the complaint and central to the plaintiff's claims. See Banneker Ventures, LLC v. Graham, 798 F.3d 1119, 1133 (D.C. Cir. 2015); Scott v. Dist. Hosp. Partners, LP, 60 F.Supp.3d 156, 161 (D.D.C. 2014). Claim preclusion may serve as the basis for a motion to dismiss “when the defense appears on the facts of the complaint and any material of which the court may take judicial notice.” Sheppard v. District of Columbia, 791 F.Supp.2d 1, 5 n.3 (D.D.C. 2011). The Court may take judicial notice of public records from other proceedings. See Covad Comms. Co. v. Bell Atl. Corp., 407 F.3d 1220, 1222 (D.C. Cir. 2005).

III. Analysis

1. Plaintiffs' Motion to Remand

Thomas argues for remand because this case is “not a securities case nor a securitization challenge” and that his claims fundamentally arise out of state law. ECF No. 18 at 2. Defendants say that removal was proper under 28 U.S.C. § 1441 and argue that the Court has two bases for subject-matter jurisdiction: diversity jurisdiction and federal-question jurisdiction. See ECF Nos. 19, 20, 21. They also argue that if the Court exercises its federal-question jurisdiction, it may exercise supplemental jurisdiction over Thomas's state law claims because they arise from the same facts and do not present novel or complex issues of law. See id. Defendants are right.

First, the Court has diversity jurisdiction over this action. The diversity statute requires that all plaintiffs are diverse from all defendants and that the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005). Defendants argue that Thomas and his wife's estate are diverse from all Defendants and that the amountin-controversy requirement is satisfied. See, e.g., ECF No. 19 at 4-5. Thomas does not dispute the amount in controversy but appears to argue that the Court lacks diversity jurisdiction because the alleged conspiracy occurred within the District of Columbia. ECF No. 18 at 4. But even if true, the location of the alleged conspiracy-while potentially relevant to a venue or personal jurisdiction analysis-does not affect the Court's diversity jurisdiction. Defendants argue that they are each citizens of states other than the District of Columbia (where Thomas and his wife's estate appear to be citizens) and Thomas makes no argument to the contrary. See ECF Nos. 18, 19, 20, 21. The Court is therefore satisfied that the requirements of § 1332 are met.

Second, in the alternative, the Court may also exercise federal-question jurisdiction over Thomas's federal claims and supplemental jurisdiction over any state law claims. District courts “shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. “To determine whether federal question jurisdiction exists, courts apply the ‘well-pleaded complaint rule,' which ‘provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.'” Inst. for Truth in Mktg. v. Total Health Network Corp., 321 F.Supp.3d 76, 82 (D.D.C. 2018) (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)).

Many of Thomas's twelve counts arise directly under federal law. For example, Count VIII seeks relief for alleged violations of the Consumer Financial Protection Act, 12 U.S.C. § 5531 et seq. See ECF No. 1-4 ¶¶ 366-398. Thomas also alleges that Defendants violated other federal laws, including the Fair Debt Collection Practices Act (Count IX), the Real Estate Settlement Procedures Act (Count X), the Truth in Lending Act (Count XI), and the Homeowners Protection Act (Count XII). See, e.g., id. ¶¶ 406, 437, 468, 499. Thomas even repeats throughout the complaint that “the Court has subject-matter jurisdiction over this action because it is brought under Federal consumer financial law, 12 U.S.C. § 5565(a)(1) [which] presents a federal question, 28 U.S.C. § 1331, et seq.” See, e.g., id. ¶ 286, 399, 430, 461. For these reasons, federal-question jurisdiction is clear where, as here, “plaintiff's statement of his own cause of action shows that it is based upon federal law.” Vaden v. Discover Bank, 556 U.S. 49, 60 (2009).

In addition, the Court may exercise supplemental jurisdiction over Thomas's state law claims because both the “state and federal claims ‘derive from a common nucleus of operative fact . . . and are such that a plaintiff would ordinarily be expected to try them all in one judicial proceeding.'” Shekoyan v. Sibley Int'l Corp., 217 F.Supp.2d 59, 75 (D.D.C. 2002) (quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966)), aff'd, 409 F.3d 414 (D.C. Cir. 2005). This would be so whether a plaintiff sued in federal...