Allen et al v. LPP et al, No. 2:2013cv06332 - Document 30 (E.D. La. 2014)

Court Description: ORDER denying 28 Motion for Leave to File; granting in part and denying in part 18 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 20 Motion to Dismiss for Lack of Jurisdiction; granting in part and denying in part 20 Motion to Dismiss for Failure to State a Claim. Signed by Judge Jay C. Zainey. (jrc)
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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA KWAN D. ALLEN & J ELINDA GIBSON ALLEN CIVIL ACTION VERSUS NO: 13-6332 LPP, ET AL. SECTION: "A" (1) ORD ER The following m otions are before the Court: Mo tio n to D is m is s ( Re c. D o c. 18 ) filed by defendants LPP Mortgage Ltd., Property Acceptance Corp., MGC Mortgage, Inc., and Beal's Bank, S.S.B. ("the LPP Movants"); Mo tio n to D is m is s ( Re c. D o c. 2 0 ) filed by Shapiro & Daigrepont, LLC and Toni Arnona ("the Shapiro Movants"); Mo tio n fo r Le ave to File Ou t o f Tim e Mo tio n to Su p p le m e n t an d Am e n d Origin al Pe titio n fo r a Se co n d Tim e ( Re c. D o c. 2 8 ) filed by pro se Plaintiffs, Kwan D. Allen and J elinda Gibson Allen. The m otions are before the Court on the briefs without oral argum ent. I. BACKGROU N D Plaintiffs Kwan D. Allen and J elinda Gibson Allen filed this federal com plaint pro se on Novem ber 4, 20 13, seeking inter alia to have this Court intervene on their behalf in ongoing1 state court foreclosure proceedings that certain of the defendants instituted against them . Plaintiffs com plain that LPP/ MGC had instituted a foreclosure action in either 20 0 9 or 20 10 and ultim ately settled the m atter with Plaintiffs by entering into a loan m odification agreem ent. Plaintiffs contend that the note holders had no intention of honoring the agreem ent because even though Mr. Allen m ade several attem pts to pay on the debt he was told by certain defendants not to m ake any paym ents. Then som etim e in late 20 13 1 It is unclear from the pleadings whether the state court proceedings have concluded in a final judgm ent or rem ain pending. Defendants once again initiated foreclosure proceedings in Orleans Parish court. Plaintiffs com plain that Defendants continue to pursue foreclosure relief in state court and that the attorneys for the note holders have ignored requests by Plaintiffs’ state court counsel to try to resolve the m atter. Plaintiffs’ com plaint in this Court seeks a declaratory judgm ent to determ ine the parties’ respective rights vis à vis the indebtedness and m ortgage on the property. Plaintiffs also seek injunctive relief from this Court asking the Court to enjoin the state court proceedings. Plaintiffs seek dam ages, both com pensatory and punitive. Via an Order and Reasons entered on Novem ber 21, 20 13 (Rec. Doc. 6), the Court addressed Plaintiffs’ m otions for em ergency relief. First, the Court assum ed without deciding (solely for the purpose of clarifying that Plaintiffs were not entitled to em ergency relief from a federal court) that it had subject m atter jurisdiction over this action. 2 Then, the Court denied Plaintiffs' request for em ergency relief, alluding to the state court rem edies that 2 The Court stated: Plaintiffs are attem pting to rely on federal question jurisdiction because they claim that the foreclosure proceedings against them constitute a violation of their constitutional rights. Recognizing that pro se pleadings are entitled to a liberal interpretation, see Cham pion v. United States, 421 Fed. Appx. 418, 420 -21 (5 th Cir. 20 11) (unpublished (citing Tex. Com ptroller of Pub. Accts. v. Liuzza, 610 F.3d 937, 941 n.4 (5th Cir. 20 10 )), Plaintiffs’ pleadings nonetheless suffer from a lack of any factual support whatsoever for the contention that any federal right is im plicated in this case. The crux of the com plaint is that Defendants have failed to honor the loan m odification agreem ent from 20 10 as evinced by their initiation of the state court action, but even if Defendants have done so in bad faith or m aliciously this conduct does not violate the federal constitution. Absent federal question jurisdiction, this Court will be com pletely without jurisdiction over this lawsuit because the parties are not com pletely diverse in citizenship, and the Declaratory J udgm ent Act, 28 U.S.C. § 220 1 does not provide an independent basis for subject m atter jurisdiction. In re B-727 Aircraft, 272 F.3d 264, 270 (5th Cir. 20 0 1). And of course, Plaintiffs are surely going to face a Rooker-Feldm an challenge once a final judgm ent issues in state court because federal courts have no appellate jurisdiction over state court decisions. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 , 28 4 (20 0 5) (citing Rooker v. Fidelity Trust Co., 263 U.S. 413, 416 (1923)). Rec. Doc. 6; Order and Reasons of 11/ 20 / 13 at 2 n.2. 2 Plaintiffs should have pursued, and explaining why this Court could not enjoin the state court proceedings. (Rec. Doc. 6). The instant m otions to dism iss were filed in J anuary of this year. The Court allowed Plaintiffs several extensions of tim e to respond to the m otions in light of their pro se status and personal circum stances. Instead of filing oppositions to the m otions, Plaintiffs eventually m oved to transfer this m atter to state court. (Rec. Doc. 26). The Court denied that m otion, explaining to Plaintiffs that this Court had no procedural vehicle to transfer a com plaint initiated in federal court to a state court. (Rec. Doc. 27). The Court then postponed the subm ission date on Defendants' m otions once again in order to allow Plaintiffs additional tim e to file their oppositions. (Rec. Doc. 28). Notwithstanding that Defendants' m otions, which were filed in J anuary, were continued to J une 20 14 for hearing in order to facilitate Plaintiffs in their efforts to oppose the m otions, Plaintiffs nonetheless did not file oppositions to Defendants' m otions and m oved instead for leave to am end their com plaint. (Rec. Doc. 28). Via the instant m otions the m oving defendants seek dism issal of all of Plaintiffs' claim s. The LPP Movants' m otion is brought under Rule 12(b)(6) and focuses on the factual deficiencies in the com plaint. The Shapiro Movants' m otion raises various Rule 12(b)(6) challenges as well as a subject m atter challenge under Rule 12(b)(1). II. D ISCU SSION Before the Court can entertain Defendants' m erits challenges under Rule 12(b)(6), or Plaintiffs' request to am end their com plaint, the Court m ust determ ine whether it has subject m atter jurisdiction over this action.3 It is incum bent upon federal courts to dism iss 3 A Rule 12(b)(6) dism issal is one on the m erits and with prejudice. See Cox, Cox, Cam el & W ilson, LLC v. Sasol N. Am ., Inc., 544 Fed. Appx. 455 (5 th Cir. 20 13) (unpublished). Therefore, a federal court m ust have subject m atter jurisdiction over an action before it can dispose of any 3 an action whenever it appears that subject m atter jurisdiction is lacking, and the Court m ust do so sua sponte if the parties have not brought the issue to the attention of the Court. Marshall v. Gibson's Prods., Inc., 584 F.2d 668, 671-72 (5 th Cir. 1978) (citing Mansfield, Coldw ater & Lake Mich. R.R. v. Sw an, 111 U.S. 379 (1884)). Again, the crux of the com plaint is that the LPP Movants breached a loan m odification agreem ent by instituting a foreclosure proceeding rather than accepting additional paym ents. See note 2, supra. The claim s raised in the com plaint are ostensibly state-law-based. But the Court cannot exercise original jurisdiction pursuant to 28 U.S.C. § 1332(a)(1) (diversity jurisdiction) over state claim s because the parties are not com pletely diverse in citizenship. The Court m ust therefore determ ine whether the com plaint alleges any claim s under federal law so that the Court can exercise original federal question jurisdiction pursuant to 28 U.S.C. § 1331. If federal question jurisdiction exists then the Court can exercise supplem ental jurisdiction over the state causes of action, see 28 U.S.C. 1367(a). But if federal question jurisdiction is lacking, then the entire com plaint m ust be dism issed for lack of jurisdiction. It is clear that Plaintiffs were eager to successfully invoke federal question jurisdiction when they filed this com plaint because they had hoped that a federal court would intervene on their behalf in the state court proceedings. Thus, in the Introduction section of the Com plaint Plaintiffs state that "[t]his is a Federal Civil Rights action brought as a result of what the Plaintiffs believe to have been a violation of, inter alia, [their] federal civil constitutional rights . . . ." (Rec. Doc. 4, First Am end. Pet. ¶ 1) (em phasis in original). Plaintiffs expressly invoke 42 U.S.C. §§ 1981 ("Equal Rights Under the Law"), 1982 claim s under Rule 12(b)(6). Id. Further, if the Court lacks jurisdiction over the original com plaint, then Plaintiffs cannot am end to add new claim s in order to create jurisdiction. See W hitm ire v. Victus Ltd, 212 F.3d 885 (5 th Cir. 20 0 0 ); In re Katrina Canal Breaches Litig., 342 Fed. Appx. 928, 931 (5th Cir. 20 0 9) (unpublished). 4 ("Property Rights of Citizens"), 1983 ("Civil Action for Deprivation of Rights"), 1985 ("Conspiracy to Interfere With Civil Rights"), & 1986 ("Action for Neglect to Prevent"). (Id.). In the J urisdiction section of the Com plaint, Plaintiffs refer to the Fourth and Fourteenth Am endm ents.4 (Id. ¶ 3). In light of the facts alleged, any claim s grounded on constitutional protections and 42 U.S.C. § 1983 are legally frivolous. To state a claim under § 1983 the plaintiff m ust allege a violation of a right secured by the Constitution and laws of the United States, and m ust show that the deprivation was com m itted by a person acting under color of state law. W est v. Atkins, 487 U.S. 42, 48 (1988) (citing Parratt v. Tay lor, 451 U.S. 527, 535 (1981)). Not only is the com plaint bereft of any factual allegations to support a violation of a federal right, the com plaint is also com pletely lacking in any suggestion of state action. Unlike 42 U.S.C. § 1983, §§ 1981, 1985, and 1986 can apply to private actors. Section 1981 prohibits intentional racial discrim ination in the m aking and enforcing of contracts. Runy on v. McCrary , 427 U.S. 160 , 168 (1976); Oden v. Oktibbeha Cnty ., 246 F. 3d 458, 463 (5th Cir. 20 0 1).5 This provision is not im plicated under the facts alleged in the com plaint, 4 The following statutory cites are also recited in the J urisdiction section: 15 U.S.C. § 1681, 12 U.S.C. § 1421, 12 U.S.C. § 1451, and 12 U.S.C. § 3751. None of these citations provide causes of action, and none of them are specifically alleged in any count in the Com plaint. 5 42 U.S.C. § 1981, entitled Equal Rights Under the Law, provides: (a) Statem ent of equal rights All persons within the jurisdiction of the United States shall have the sam e right in every State and Territory to m ake and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishm ent, pains, penalties, taxes, licenses, and exactions of every kind, and to no other. (b) “Make and enforce contracts” defined For purposes of this section, the term “m ake and enforce contracts” includes 5 which lack any suggestion of discrim inatory anim us. Plaintiffs do not indicate which section of § 1985 that they rely upon. But § 1985(1) pertains to conspiracies to prevent a federal officer from discharging his duties, and is therefore patently inapplicable to this case. 42 U.S.C. § 1985(1); Bry ant v. Military Dep't of Miss., 597 F.3d 678, 687 (5th Cir. 20 10 ).6 Section 1985(2) requires a nexus with a federal judicial proceeding, which renders this section patently inapplicable. Bradt v. Sm ith, 634 F.2d 796, 799 (5th Cir. 1981) And §§ 1985(2) & (3) both require claim s predicated on allegations of discrim inatory anim us, which again is not part of this case. Bry ant, 597 F.3d at 687.78 Section 1986 does not provide an independen t cause of action but instead requires the the making, performance, modification, and termination of contracts, and the enjoym ent of all benefits, privileges, term s, and conditions of the contractual relationship. (c) Protection against im pairm ent The rights protected by this section are protected against im pairm ent by nongovernm ental discrim ination and im pairm ent under color of State law. 6 42 U.S.C. § 1985(1), entitled Preventing an Officer From Perform ing Duties, provides: If two or m ore persons in any State or Territory conspire to prevent, by force, intim idation, or threat, any person from accepting or holding any office, trust, or place of confidence under the United States, or from discharging any duties thereof; or to induce by like m eans any officer of the United States to leave any State, district, or place, where his duties as an officer are required to be perform ed, or to injure him in his person or property on account of his lawful discharge of the duties of his office, or while engaged in the lawful discharge thereof, or to injure his property so as to m olest, interrupt, hinder, or im pede him in the discharge of his official duties. 7 42 U.S.C. § 1985(2), entitled Obstructing J ustice; Intim idating Party, Witness, or J uror, provides: If two or m ore persons in any State or Territory conspire to deter, by force, intim idation, or threat, any party or witness in any court of the United States from attending such court, or from testifying to any 6 existence of a valid claim under § 1985.9 Bradt, 634 F.2d at 799 n.3. Therefore, like the m atter pending therein, freely, fully, and truthfully, or to injure such party or witness in his person or property on account of his having so attended or testified, or to influence the verdict, presentm ent, or indictm ent of any grand or petit juror in any such court, or to injure such juror in his person or property on account of any verdict, presentm ent, or indictm ent lawfully assented to by him , or of his being or having been such juror; or if two or m ore persons conspire for the purpose of im peding, hindering, obstructing, or defeating, in any m anner, the due course of justice in any State or Territory, with intent to deny to any citizen the equal protection of the laws, or to injure him or his property for lawfully enforcing, or attem pting to enforce, the right of any person, or class of persons, to the equal protection of the laws. 8 42 U.S.C. § 1985(3), entitled Depriving Persons of Rights or Privileges, provides: If two or m ore persons in any State or Territory conspire or go in disguise on the highway or on the prem ises of another, for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and im m unities under the laws; or for the purpose of preventing or hindering the constituted authorities of any State or Territory from giving or securing to all persons within such State or Territory the equal protection of the laws; or if two or m ore persons conspire to prevent by force, intim idation, or threat, any citizen who is lawfully entitled to vote, from giving his support or advocacy in a legal m anner, toward or in favor of the election of any lawfully qualified person as an elector for President or Vice President, or as a Mem ber of Congress of the United States; or to injure any citizen in person or property on account of such support or advocacy; in any case of conspiracy set forth in this section, if one or m ore persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived m ay have an action for the recovery of dam ages occasioned by such injury or deprivation, against any one or m ore of the conspirators. 9 42 U.S.C. § 1986, entitled Action for Neglect to Prevent, provides: Every person who, having knowledge that any of the wrongs conspired to be done, and m entioned in section 1985 of this title, are about to be com m itted, and having power to prevent or aid in preventing the com m ission of the sam e, neglects or refuses so to do, 7 claim s purportedly brought under § 1983, the §§ 1981, 1985, and 1986 claim s are also legally frivolous in light of the com plaint's factual allegations. For the foregoing reasons, even under the m ost liberal of constructions, 10 the com plaint does not allege any claim s under federal law, a deficiency not overcom e by conclusory claim s of federal jurisdiction. The question then becom es whether the purported federal claim s are subject to dism issal pursuant to Rule 12(b)(6), which the Court can only do if it has original subject m atter jurisdiction, or if the claim s are subject to dism issal without prejudice under Rule 12(b)(1) based on the absence of subject m atter jurisdiction. Either way the federal claim s fail, but dism issal pursuant to Rule 12(b)(6) gives the Court the discretion to nonetheless exercise supplem ental jurisdiction over the state law claim s. 11 See 28 U.S.C. § 1367(c)(3). In m aking the Rule 12(b)(1) versus 12(b)(6) determ ination the Court is m indful that it if such wrongful act be com m itted, shall be liable to the party injured, or his legal representatives, for all dam ages caused by such wrongful act, which such person by reasonable diligence could have prevented; and such dam ages m ay be recovered in an action on the case; and any num ber of persons guilty of such wrongful neglect or refusal m ay be joined as defendants in the action; and if the death of any party be caused by any such wrongful act and neglect, the legal representatives of the deceased shall have such action therefor, and m ay recover not exceeding $ 5,0 0 0 dam ages therein, for the benefit of the widow of the deceased, if there be one, and if there be no widow, then for the benefit of the next of kin of the deceased. But no action under the provisions of this section shall be sustained which is not com m enced within one year after the cause of action has accrued. 10 Pro se pleadings are given the benefit of liberal construction. Cooper v. Sheriff of Lubbock Cnty ., 929 F.2d 10 78, 10 81 (5th Cir. 1991). 11 Even if the Court had dism issed the federal claim s pursuant to Rule 12(b)(6), it would have declined jurisdiction over the state law claim s because this case rem ains in the earliest of stages. The general rule is that a federal court should decline to exercise supplem ental jurisdiction when all federal claim s are dism issed prior to trial. Brim v. ExxonMobil Pipeline Co., 213 Fed. Appx. 30 3, 30 5 (5th Cir. 20 0 7). 8 m ust "avoid conflating" the question of subject m atter jurisdiction with the question of whether the plaintiff has stated a valid claim for relief. Sm ith v. Regional Trans. Auth., No. 13-30 647, — F.3d —, 20 14 WL 2853584, at *2 (5th Cir. J une 23, 20 14) (citing Arbaugh v. Y&H Corp., 546 U.S. 50 0 , 510 -11 (20 0 6)). The Court m ust m ake this distinction because "the absence of a valid (as opposed to arguable) cause of action does not im plicate subject m atter jurisdiction." ACS Recov. Servs., Inc. v. Griffin, 723 F.3d 518, 523 (5 th Cir. 20 13) (quoting Steel Co. v. Citizens for a Better Envir., 523 U.S. 83, 89 (1998)). But subject m atter is im plicated where the claim is "so insubstantial, im plausible, foreclosed by prior decisions . . ., or otherwise com pletely devoid of m erit as not to involve a federal controversy." See id. (quoting Oneida Indian N ation of N .Y. v. Cnty . of Oneida, 414 U.S. 661, 666 (1974)). If the claim s that purport to invoke federal jurisdiction are not "colorable," i.e., if the claim s are "'im m aterial and m ade solely for the purpose of obtaining jurisdiction' or [are] 'wholly insubstantial and frivolous,'" then the issue becom es one of subject m atter jurisdiction. See Arbaugh, 546 U.S. at 513 n.10 (quoting Bell v. Hood, 327 U.S. 678, 682-83 (1946). The Court is persuaded that the com plaint in this m atter is so utterly devoid of any colorable federal claim that the com plaint is subject to dism issal pursuant to Rule 12(b)(1) for lack of subject m atter jurisdiction. Plaintiffs' attem pt to sue private, non-governm ental actors for civil rights violations, and to sue those sam e defendants for violations of §§ 1981, 1985, and 1986 when those statutes are not even rem otely im plicated by the factual allegations, render any federal claim s "insubstantial and frivolous," and therefore incapable of supporting subject m atter jurisdiction. In lieu of opposing the m otions to dism iss, Plaintiffs have m oved to am end their com plaint once again, thereby hoping to m oot the pending m otions to dism iss. Because the Court lacks subject m atter jurisdiction over the existing com plaint, the clear law of this 9 circuit precludes Plaintiffs from am ending their com plaint to retroactively create jurisdiction where none exists. In re Katrina Canal Breaches Litig., 342 Fed. Appx. at 931; W hitm ire, 212 F.3d at 888. Accordingly, and for the foregoing reasons; IT IS ORD ERED that the Mo tio n to D is m is s ( Re c. D o c. 18 ) filed by defendants LPP Mortgage Ltd., Property Acceptance Corp., MGC Mortgage, Inc., and Beal's Bank, S.S.B. and the Mo tio n to D is m is s ( Re c. D o c. 2 0 ) filed by Shapiro & Daigrepont, LLC and Toni Arnona are GRAN TED IN PART IN D EN IED IN PART. The m otions are GRAN TED insofar as the com plaint is D ISMISSED in its entirety W ITH OU T PREJU D ICE; IT IS FU RTH ER ORD ERED that the Mo tio n fo r Le ave to File Ou t o f Tim e Mo tio n to Su p p le m e n t an d Am e n d Origin al Pe titio n fo r a Se co n d Tim e ( Re c. D o c. 2 8 ) filed by pro se Plaintiffs, Kwan D. Allen and J elinda Gibson Allen is D EN IED . August 19, 20 14 _______________________________ J AY C. ZAINEY UNITED STATES DISTRICT J UDGE 10