Farley et al v. Bank of America, N.A. et al, No. 3:2014cv00568 - Document 53 (E.D. Va. 2015)
Court Description: MEMORANDUM OPINION. Signed by District Judge James R. Spencer on 6/11/2015. Copy of Memorandum Opinion was mailed to the Farleys and electronically sent to all counsel of record. (sbea, )
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Farley et al v. Bank of America, N.A. et al Doc. 53 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION ALECIA Y. FARLEY, et al., Plaintiffs, v. Action No. 3:14-CV-568 BANK OF AMERICA, N.A., et al., Defendants. MEMORAN D U M OPIN ION THIS MATTER is before the Court on Defendants Bank of Am erica, N.A.’s and Bank of Am erica Hom e Loan Servicing L.P.’s (“BANA’s”) Motion to Dism iss (“Motion”), ECF No. 9 and Motion for Sanctions, ECF No. 17. Also before the Court is a Motion to Deny Defendant’s Notice of Waiver of Oral Argum ent, ECF. No. 19, a Motion for Leave to File Plaintiff’s Response and Motion to Dism iss Defendant’s Motion for Sanctions, ECF No. 37, a Motion for Leave to File Plaintiff’s Second Motion to Dism iss Defendant’s Motion for Sanctions, ECF No. 39, and a Motion to Seek Leave for Court to Initiate and Direct an Order for Discovery From Defendants, ECF No. 48, filed by Plaintiffs Alecia Y. Farley and Marvin A. Farley (“Farleys”). For the reasons explained in the Mem orandum Opinion, the Court will: (1) GRANT BANA’s Motion to Dism iss, ECF No. 9, and the Com plaint will be DISMISSED WITH PREJ UDICE, ECF No. 9; (2) GRANT BANA’s Motion for Sanctions, ECF No. 17; (3) DENY the Farleys’ Motion to Deny Defendant’s Notice of Waiver of Oral Argum ent, ECF. No. 19; (4) DENY AS MOOT the Farleys’ Motion for Leave to File Plaintiff’s Response and Motion to Dism iss Defendant’s Motion for Sanctions, ECF No. 37; (5) DENY AS MOOT the Farleys’ Motion for Leave to File Plaintiff’s Second Motion to Dism iss Defendant’s Motion for Sanctions, ECF No. 39; and (6) DENY the Farleys’ Motion to Seek Leave for Court to Initiate and Direct an Order for Discovery From Defendants, ECF No. 48 . 1 Dockets.Justia.com I. PROCED U RAL BACKGROU N D On August 12, 20 14, the Farleys filed a Com plaint in this Court against BANA, who appears to be the holder and servicer of a note and m ortgage to property the Farleys own or owned at one tim e. The com prehensive, thirty-one (31) page com plaint alleges the following claim s against BANA: Count I: Violation of the Virginia Consum er Protection Act; Count II: Violation of 15 U.S.C. § 1692(f)(1) (Unfair Practices); Count III: Conversion; Count IV: Fraudulent Concealm ent; Count V: Violation of crim inal code 18 U.S.C. § 1341 (Fraud and Swindles); and Count VI: Violation of Uniform Com m ercial Code (“UCC”) § 8-10 2 (Adverse Claim ) and § 3-30 5 (Recoupm ent).1 The allegations stem from the Farleys’ belief that BANA obtained the Farleys’ financial inform ation through illicit m eans and entered them into a loan m odification without their knowledge or consent. The Farleys have now filed seven lawsuits arising out of the m ortgage loan and the attem pted foreclosure sale of the property located at 1240 New Bethel Road, Meherrin, Virginia. In sum , the Farleys attem pt to distinguish the instant suit from their four state courts lawsuits, which were dism issed with prejudice by the Circuit Court for Price Edward County, Virginia, by claim ing that their current lawsuit arises from BANA unilaterally creating a new loan contract. On Septem ber 5, 20 14, BANA filed a Motion to Dism iss the Farleys’ Com plaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. ECF No. 9. On Septem ber 23, 20 14, The Farleys filed a response entitled, “Counter-Claim for Motion to Dism iss.” ECF No. 12. Subsequently, BANA filed its reply on Septem ber 29, 20 14. ECF No. 13; see ECF No. 35. II. FACTU AL BACKGROU N D On May 5, 20 0 6, the Farleys obtained a m ortgage loan from Am erica’s Wholesale Lender (“AWL”) in the am ount of $ 98,80 0 .0 0 (the “Loan”). In conjunction with the Loan, the Farleys 1 This last Count is incorrectly labeled as “Count V” in Plaintiffs’ com plaint. See Com plaint (“Com pl.”) at 27. 2 executed an Adjustable Rate Note (the “Note”) and a Deed of Trust (the “Deed”) on May 5, 20 0 6. On August 30 , 20 12, the Farleys allege that they sent “a Qualified Written Request and a CEASE and DESIST” letter to BANA (the “August 30 , 20 12 Letter”). Com plaint (“Com pl.”) ¶ 4. In the August 30 , 20 12 letter, the Farleys dem anded that BANA cease all collection efforts associated with their m ortgage loan and further dem and that BANA respond to the August 30 , 20 12 letter by affidavit within ten days. Id. Subsequently, on October 6, 20 12, the Farleys contend that BANA sent them a letter regarding a potential loan m odification as a result of the United States Departm ent of J ustice and State Attorneys General global settlem ent. Id. ¶ 6. According to the Farleys, BANA was “clandestinely” attem pting to get the Farleys to believe they were approved for a loan m odification. Id. ¶ 8. The October 6, 20 12 letter indicates that the Farleys were being evaluated for loan m odification options. On October 11, 20 12, BANA responded to the August 30 , 20 12 letter by identifying the owner of the Note and the servicer inform ation for the Farleys’ m ortgage loan. Id. ¶ 11. The October 11, 20 12 response also indicated that BANA would provide the Farleys with a detailed payoff statem ent. Id. On October 16, 20 12, the Farleys declined BANA’s offer to explore a loan m odification. Id. ¶ 12. On October 17, 20 12, BANA provided the Farleys with a loan paym en t history, a verification of the debt, and a notice that there was no foreclosure sale scheduled at that tim e. Id. ¶ 15. According to the Farleys, BANA’s correspondence was part of a schem e designed to “throw Plaintiffs off the scent.” Id. ¶ 16. On October 23, 20 12, the Farleys received an “Escrow Account Review.” Id. ¶ 18. On Decem ber 5, 20 12, BANA sent the Farleys another notice of escrow review. Id. ¶ 19. On Decem ber 28, 20 12, the Farleys sent a letter to BANA again declining a loan m odification. Id. ¶ 20 . According to the Farleys, at this point, BANA “‘clandestinely’ entered the Plaintiffs into a ‘hom e-m ade’ contract . . . .” Id. ¶ 22. Subsequently, on February 1, 20 13, the Farleys received an account statem ent. Id. ¶ 23. On February 5, 20 13, BANA sent the Farleys a letter, which 3 confirm ed that the Farleys’ original loan docum ents were still in effect and BANA would continue to service the loan pursuant to the original loan docum ents. Id. ¶ 24. On May 31, 20 13, the Farleys sent BANA a “Notification of Adverse Claim Recoupm ent Claim ,” which purported to place som e obligations on BANA to respond and accept the claim s. Id. ¶ 25. By not responding, the Farleys allege that BANA is in default of various UCC letters and filings. Id. ¶¶ 25, 26. The Farleys further allege that, subsequently, they sent BANA several letters that requested BANA explain how it “creat[ed] and activate[d] a new escrow account [for the Farleys] from ‘ghost’ financials.” Id. ¶ 27. In conclusion, the Farleys “have [m ade] several attem pts to rem edy the m atter adm inistratively.” Id. ¶ 28. III. LEGAL STAN D ARD A m otion to dism iss for failure to state a claim upon which relief can be granted challenges the legal sufficiency of a claim , rather than the facts supporting it. Fed. R. Civ. P. 12(b)(6); Goodm an v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 20 0 7); Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). A court ruling on a Rule 12(b)(6) m otion m ust therefore accept all of the factual allegations in the com plaint as true, see Edw ards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999); W arner v. Buck Creek Nursery , Inc., 149 F. Supp. 2d 246, 254-55 (W.D. Va. 20 0 1), in addition to any provable facts consistent with those allegations, Hishon v. King & Spalding, 467 U.S. 69, 73 (198 4), and m ust view these facts in the light m ost favorable to the plaintiff, Christopher v. Harbury , 536 U.S. 40 3, 40 6 (20 0 2). The Court can consider the com plaint, its attachm ents, and docum ents “attached to the m otion to dism iss, so long as they are integral to the com plaint and authentic.” Sec’y of State for Defence v. Trim ble Navigation Ltd., 484 F.3d 70 0 , 70 5 (4th Cir. 20 0 7). To survive a m otion to dism iss, a com plaint m ust contain factual allegations sufficient to provide the defendant “notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Tw om bly , 550 U.S. 544, 555 (20 0 7) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Rule 8(a)(2) requires the com plaint to allege facts showing that the claim is plausible, 4 and these “[f]actual allegations m ust be enough to raise a right to relief above the speculative level.” Tw om bly , 540 U.S. at 555; see id. at 555 n.3. The Court need not accept legal conclusions presented as factual allegations, id. at 555, or “unwarranted inferences, unreasonable conclusions, or argum ents,” E. Shore Mkts., Inc. v. J.D. Assocs. Ltd. P’ship, 213 F.3d 175, 18 0 (4th Cir. 20 0 0 ). IV. D ISCU SSION A. Partie s ’ Argu m e n ts In its Motion to Dism iss, BANA essentially m akes three argum ents. First, BANA argues that the Com plaint generally fails to com ply with Rule 8 and Rule 12(b)(6) of the Federal Rules of Civil Procedure. Second, BANA argues that the Farleys’ claim s are barred by res judicata. Third, BANA contends that each of the Farleys’ claim s fail as a m atter of law. Because the Court finds BANA’s third argum ent dispositive, the parties’ argum ents only as to BANA’s contention that each of the Farleys’ claim s fail as a m atter of law are set forth below. BANA argues, specifically, that the Farleys fail to state a claim for violation of the Virginia Consum er Protection Act (“VCPA”). Specifically, the Farleys allege that BANA violated the VCPA “by m ailing Plaintiffs com m unications which were deceptive, fraudulent, and m isrepresentations of actual[] facts . . . .” Com pl. ¶ 32. However, BANA argues that this claim is without m erit for the following reasons: (1) this lawsuit does not involve a consum er transaction as defined under the VCPA and (2) the VCPA does not apply to banks, savings institutions, credit unions, and m ortgage lenders. In response, the Farleys for the first tim e contend that this suit involves a consum er transaction because BANA sent them letters, which the Farleys now characterize as “advertisem ents” under the VCPA. For support, the Farleys allege that BANA’s October 6, 20 12 letter to them (wherein BANA addresses the loan m odification review process) was an advertisem ent. 5 Next, BANA argues that the Farleys fail to state a claim pursuant to § 1692(f)(1) of the Fair Debt Collection Practices Act (“FDCPA”). BANA explains that § 1692f(1) provides that collecting any am ount that is not expressly authorized by the agreem ent creating the debt or perm itted by law is an FDCPA violation and further asserts that FDCPA claim s pursuant to § 1692f(1) are governed by a one year statute of lim itations. See 15 U.S.C. § 1692k; Thom as v. W ells Fargo Bank, N.A., No. 4:10 -CV-0 0 0 60 , 20 11 WL 1877674, at *2 (W.D. Va. May 17, 20 11). Here, BANA contends, the Farleys’ FDCPA claim is barred by the one year statute of lim itations because the com m unications referenced in support of their FDCPA claim were sent to the Farleys in October and Decem ber 20 12 and February 20 13. Because they did not file the instant lawsuit asserting the aforem entioned FDCPA claim until August 20 14, they are barred by the applicable one year statute of lim itations from asserting it now. In response, the Farleys continue to recite their belief that they were placed in a loan m odification without their approval as support for their FDCPA claim . The Farleys do no address BANA’s assertion that the FDCPA claim is barred by the applicable one year statute of lim itations. Third, BANA argues that the Farleys do not allege any facts supporting a conversion claim and, thus, it should be dism issed. In sum , BANA argues that the Farleys dot not allege any facts that would support a conclusion that BANA exercised ownership over any good or chattel belonging to the Farleys. Instead, according to BANA, the Farleys, without m ore, only assert that BANA som ehow “converted” their loan by changing the paym ent am ount as a result of an escrow review. Therefore, BANA argues, the Farleys’ allegations, or lack thereof, do no support a claim for conversion under Virginia law. In response, the Farleys contend that their conversion claim is based on their m ortgage paym ent changing from $ 922.28 in May 20 0 6 to $ 987.28 in Decem ber 20 12. Therefore, the Farleys only contend that a change in their loan paym ent am ount was conversion. 6 Fourth, BANA asserts that the Farleys fail to state a claim for fraudulent concealm ent. Says BANA, the Farleys’ allegations that BANA engaged in “deceptive” behavior by “conceal[ing] m aterial facts,” without m ore, constitutes m ere legal conclusions that are not sufficient to withstand a m otion to dism iss under Rule 12(b)(6) and Iqbal. Absent an alleged duty or specific facts supporting fraud, BANA argues that the Farley’s claim fails as a m atter of law and thus, should be dism issed. As with the Farleys’ other claim s, their fraudulent concealm ent claim is prem ised on their allegation that BANA unilaterally caused the Farleys to be entered into a new loan agreem ent. Therefore, in their Response, the Farleys argue that BANA is fraudulently concealing evidence of this new loan agreem ent. Additionally, BANA argues that the Farleys cannot state a private cause of action for m ail fraud.2 Because there is no private cause of action for m ail fraud pursuant to18 U.S.C § 1341, BANA asks the Court to dism iss the Farleys’ “fraud and swindles” claim . In their response, the Farleys’ do not establish how they have a private cause of action for m ail fraud. Finally, BANA argues that the Farleys’ UCC claim s—i.e., UCC § 8-10 2 (Adverse Claim ) and UCC § 3-30 5 (Recoupm ent)—fail as a m atter of law. BANA assets that, other than a single, conclusory allegation that it violated the UCC, the Farleys fail to allege any facts that would establish such a claim . BANA asserts that the Farleys’ UCC claim s are based on their erroneous theory that their “Notification of Adverse Claim and Recoupm ent” som ehow im posed UCC obligations on BANA. BANA argues that the Farleys’ UCC theory that liability can be discharged through the filing of UCC financing statem ents has been rejected as frivolous by the Fourth Circuit and other courts. Accordingly, because the Farleys fail to state any plausible basis for their UCC claim s, BANA requests that the Court dism iss the claim s. 2 In their Com plaint, the Farleys assert a claim labeled “fraud and swindles” and, in support of this claim , they cite 18 U.S.C § 1341, which governs m ail fraud. Com plaint (“Com pl.”) ¶ 83. 7 The Farleys do not refute BANA’s argum ents as to the UCC claim s. Indeed, in their Response, the Farleys now cite to the Adm inistrative Procedure Act as placing on BANA som e duty to respond. V. AN ALYSIS A. BAN A’s Mo tio n to D is m is s In its Motion to Dism iss, BANA essentially m akes three argum ents. First, BANA argues that the Com plaint generally fails to com ply with the Rule 8 and Rule 12(b)(6) of the Federal Rules of Civil Procedure. Second, BANA argues that the Farleys’ claim s are barred by res judicata. Third, BANA contends that each of the Farleys’ claim s fail as a m atter of law. The Court will address these argum ents in reverse chronological order. To recall, the Farleys allege the following claim s against BANA: Count I: Violation of the Virginia Consum er Protection Act; Count II: Violation of 15 U.S.C. § 1692(f)(1) (Unfair Practices); Count III: Conversion; Count IV: Fraudulent Concealm ent; Count V: Violation of crim inal code 18 U.S.C. § 1341 (Fraud and Swindles); and Count VI: Violation of Uniform Com m ercial Code (“UCC”) § 8-10 2 (Adverse Claim ) and § 3-30 5 (Recoupm ent). However, each claim is subject to dism issal for the reasons that follow. i. Virgin ia Co n s u m e r Pro te ctio n Act ( “VCPA”) The Farleys attem pt to state a claim against BANA based on the alleged violation of the Virginia Consum er Protection Act (“VCPA”). Com pl. ¶¶ 29-39. Specifically, they allege that BANA violated the VCPA “by m ailing Plaintiffs com m unications which were deceptive, fraudulent, and m isrepresentations of actually facts . . .” Com pl. ¶ 32. Therefore, say the Farleys, BANA violated § 59.1-20 0 of the VCPA. Id. ¶ 30 ; see Va. Code Ann. § 59.1-20 0 . To state a claim under the VCPA, the Farleys m ust allege “(1) fraud, (2) by a supplier, (3) in a consum er transaction.” Nahigian v. Juno Loudoun, LLC, 684 F. Supp. 2d 731, 741 (E.D. Va. 20 10 ). Addressing the last elem ent first, a consum er transaction is defined as the “advertisem ent, sale, lease, license or offering for sale, lease or license of goods or services to be 8 used prim arily for personal, fam ily or household purposes.” Va. Code Ann. § 59.1-198. This m atter does not involve a consum er transaction as defined under the VCPA. Moreover, the VCPA explicitly states that it does not apply to banks, savings institutions, credit unions, and m ortgage lenders. Id. § 59.1-199; Green v. CitiMortgage, Inc., C/ A, No. 5:11CV0 32, 20 11 WL 5866230 , at *7 (W.D. Virginia, Nov. 21, 20 11) (“[T]he VCPA specifically excludes from its coverage ‘m ortgage lenders.’”) (citing Va Code § 59.1-199). The Com plaint involves BANA, which is a bank. Therefore, the Farleys have failed to state a claim under the VCPA. BANA's Motion pursuant to Rule 12(b)(6) will be GRANTED as to Count I. ii. Fair D e bt Co lle ctio n s Practice s Act ( “FD CPA”) The Farleys fail to state any claim pursuant to Section 1692(f)(1) of the Fair Debt Collection Practices Act (“FDCPA”). Here, the BANA com m unications referenced in support of their FDCPA claim were sent to the Farleys in October and Decem ber of 20 12 and February of 20 13. Com pl. ¶¶ 42-45. The Farleys did not file this lawsuit asserting their FDC{A claim until August of 20 14. Thus, the FDCPA’s one year statute of lim itations has since run on any instances of alleged m isconduct that occurred in October and Decem ber of 20 12 and February of 20 13. See Thom as v. W ells Fargo Bank, N.A., No. 4:10 CV0 0 0 60 , 20 11 WL 1877674, at *2 (W.D. Va. May 17, 20 11) (citing 15 U.S.C. § 1692k; The Cancer Found., Inc. v. Cerberus Capital Mgm t., 559 F.3d 671, 674– 75 (7th Cir. 20 0 9) (“[D]ism issal is appropriate when the plaintiff pleads him self out of court by alleging facts sufficien t to establish the com plaint's tardiness.”). Because the Farleys’ claim pursuant to § 1692(f)(1) of the FDCPA is tim e barred, BANA's Motion will be GRANTED as to Count II. iii. Co n ve rs io n The Farleys fail to plausibly support their conversion claim with any factual allegations that BANA com m itted any wrongdoing. The Farleys assert, without m ore, that BANA som ehow “converted” their loan by changing the paym ent am ount as a result of an escrow review. Com pl. 9 ¶ 50 . Therefore, the Farleys only contend that a change in their loan paym ent am ount was conversion. Indeed, the Farleys do not allege any facts that would support a conclusion that BANA exercised ownership over any good or chattel belonging to the them . The Farleys’ allegations, without m ore, constitute m ere legal conclusions that are not sufficient to withstand a m otion to dism iss under Rule 12(b)(6). Because the Farleys have failed to state a claim for conversion, BANA's Motion pursuant to Rule 12(b)(6) will be GRANTED as to Count III. iv. Frau d u le n t Co n ce alm e n t The Farleys fail to state any claim for fraudulent concealm ent. In Virginia, “concealm ent of a m aterial fact by one who knows that the other party is acting upon the assum ption that the fact does not exist constitutes actionable fraud.” Virginia Natural Gas Co., Inc. v. Ham ilton, 249 Va. 449, 455 (1995) (citations and quotations om itted). “Proof of fraud by nondisclosure requires evidence of a knowing and deliberate decision not to disclose a m aterial fact.” Cohn v. Know ledge Connections, Inc., 266 Va. 362, 368 (20 0 3) (citations and quotations om itted). However, “[s]ilence does not constitute concealm ent in the absence of a duty to disclose.” Bank of Montreal v. Signet Bank, 193 F.3d 818, 827 (4th Cir. 1999) (applying Virginia law). “A duty to disclose does not norm ally arise when parties are engaged in an arm ’s length transaction.” W hite v. Potocska, 589 F. Supp. 2d 631, 642 (E.D. Va. 20 0 8) (citations and quotations om itted). Indeed, a claim for fraud m ust be pled with particularity pursuant to Rule 9(b) of the Federal Rules of Civil Procedure. Pursuant to Rule 9(b), “a party m ust state with particularity the circum stances constituting fraud . . . .” Fed. R. Civ. P. 9(b). “The circum stances required to be pled with particularity are the tim e, place, and contents of the false representations, as well as the identity of the person m aking the m isrepresentation and what he obtained thereby.” W olf v. Fed. N at. Mortgage Ass’n, 512 F. Appx. 336, 343 (4th Cir. 20 13). Conclusory allegations of fraud do not satisfy the requirem ents of Rule 9(b). Goldstein v. Malcolm G. Fries Y Assocs., 72 F. Supp. 2d 620 , 627 (E.D. Va. 1999). 10 Here, the Farleys do not plead fraud with particularity. Sim ply incorporating words like “deceptive” and “conceal m aterial facts” is not enough to plead the circum stances of false representations with any particularity. Com pl. ¶ 32. Additionally, the Farleys do not allege any basis for concluding that BANA owed them any duty—absent an alleged duty or specific facts supporting fraud, the Farleys’ claim fails as a m atter of law. Therefore, the Farleys have failed to state a claim for fraudulent concealm ent. Accordingly, BANA's Motion will be GRANTED as to Count IV. v. “Frau d a n d Sw in d le s ” ( i.e ., Mail Frau d ) BANA asserts that the Farleys’ m ail fraud claim s, labeled “fraud and swindles” in their Com plaint, see Com pl. ¶83, under 18 U.S.C. § 1341 fails because there is no private right of action under this federal statute. The Farleys do not refute BANA’s argum ent as to this claim . The Suprem e Court has held: [t]he single m ost significant reason for the expansive use of civil RICO has been the presence in the statute, as predicate acts, of m ail and wire fraud violations. Prior to RICO, no federal statute had expressly provided a private dam ages rem edy based upon a violation of the m ail or wire fraud statutes, which m ake it a federal crim e to use the m ail or wires in furtherance of a schem e to defraud. Sedim a, S.P.R.L. v. Im rex Co., 473 U.S. 479, 50 1, (1985) (citing 18 U.S.C. §§ 1341, 1343). “Courts in this circuit have expressly held that ‘[n]o private right of action exists for m ail fraud, or for wire fraud.’” Uhre v. Em m ett A. Larkin Co., 20 5 F. Supp. 2d 474, 478 (D. Md. 20 0 2) (quoting Baker v. Data Dy nam ics, Inc., 561 F. Supp. 1161, 1166 (W.D.N.C.1983) (internal citations and quotations om itted)). Therefore, the Farleys have failed to state a claim for m ail fraud. Accordingly, BANA's Motion pursuant to Rule 12(b)(6) will be GRANTED as to Count V. vi. U n ifo rm Co m m e rcial Co d e BANA argues that because the Farleys fail to present any valid basis for their UCC claim s asserted in the instant m atter, these claim s should be dism issed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Indeed, the Farleys’ UCC claim s—i.e., UCC § 8-10 2 (Adverse 11 Claim ) and UCC § 3-30 5 (Recoupm ent)—fail. The Farleys’ UCC claim s are based on their belief that their various correspondence and dem ands to BANA placed an obligation on BANA. Com pl. ¶¶ 93. Other than a few conclusory allegations that BANA violated the UCC, the Farleys fail to allege any other facts. Accordingly, because the Farleys fail to state any plausible basis for their UCC claim s, BANA’s Motion will be GRANTED as to Count VI. B. BAN A’s Mo tio n fo r San ctio n s In its Motion for Sanctions, ECF No. 18, BANA requests that the Court im pose nonm onetary Rule 11 sanctions upon the Farleys—that being, dism issal of the instant lawsuit with prejudice and a pre-filing injunction (i.e., a “gatekeeper” order). BANA’s Motion for Sanctions will be GRANTED and the Com plaint will be DISMISSED WITH PREJ UDICE. ECF No. 18. On J une 26, 20 13, J udge Gibney issued the following notice to the Farleys in a suit, virtually identical in substance to the instant one, they filed against Bank of Am erica’s officers: The Federal Rules of Civil Procedure . . . allow a court to sanction parties who file frivolous lawsuits or m otions “presented for any im proper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation.” Fed. R. Civ. P. 11(b). This being plaintiffs’ fifth lawsuit in less than two years related to the foreclosure of their hom e, the Court hereby puts the plaintiffs on notice that continuing to file frivolous lawsuits, such as this one, will likely result in sanctions. The Farleys have filed several lawsuits related to the foreclosure of the hom e—two being filed since J udge Gibney issued the aforem entioned warning in an order. The Court finds that, tim e and tim e again, the Farleys keep bringing sim ilar lawsuits on inadequate facts, and that is why the Farleys will be sanctioned in the following m anner. First, BANA’s Motion to Dism iss, ECF No. 9, will be GRANTED and the instant lawsuit will be DISMISSED WITH PREJ UDICE. Second, having GRANTED BANA’s Motion for Sanctions, ECF No. 18, the Court will im pose certain restrictions upon the Farleys. The Court finds it appropriate to protect itself from the Farleys’ excessive filings and to protect opposing parties from m eritless lawsuits. Arm strong v. Koury Corp., 16 F. Supp. 2d 616, 619 (M.D.N.C. 12 1998) (“Courts have the authority to protects defendants from the harassm ent of frivolous and vexatious lawsuits, and to protect them selves from having to process frivolous and repetitive papers.”). It is well established that a litigant who floods the Court with repetitive com plaints m ay be subject to a system of pre-filing review. See In re Burnley , 988 F.2d 1, 3 (4th Cir. 1992) (holding that district courts have the authority to im pose a pre-filing review system on frequent filers of frivolous com plaints). There are no exceptions for pro se litigants. Arm strong, 16 F. Supp. 2d at 620 . Because the Court GRANTS BANA’s Motion for Sanctions, the Farleys are INSTRUCTED as follows: 1. Before filing any such lawsuit, the Farleys m ust first subm it to the clerk of court where the Farleys seek to file the lawsuit: (i) an application for leave to file suit; (ii) a copy of the accom panying Order; and (iii) a notarized affidavit or declaration stating that the m atters raised in the lawsuit have not been raised or decided in any other lawsuit, are brought in good faith, and are not for the purpose of harassm ent; 2. The Court where the Farleys seek to file m ust grant them leave to file the lawsuit before filings therein m ay be docketed or served on any party; and 3. Violation of the accom panying Order m ay result in a finding of contem pt and im position of civil penalties. The Court dispenses with oral argum ent because the facts and legal contentions are adequately presented in the m aterial before the Court and oral argum ent would not aid in the decisional process. E.D. Va. Loc. Civ. R. 7(j). VI. CON CLU SION For the foregoing reasons, the Court hereby GRANTS BANA’s Motion and the Com plaint will be DISMISSED WITH PREJ UDICE. ECF No. 9. The Court finds it unnecessary to address BANA’s alternative argum ent that the Farleys’ claim s are barred by res judicata. Further, upon due consideration, the Court will: 13 1. GRANT BANA’s Motion for Sanctions, ECF No. 17, and, accordingly, DENY AS MOOT the Farleys’ Motion for Leave to File Plaintiff’s Response and Motion to Dism iss Defendant’s Motion for Sanctions, ECF No. 37, and DENY AS MOOT the Farleys’ Motion for Leave to File Plaintiff’s Second Motion to Dism iss Defendant’s Motion for Sanctions, ECF No. 39; 2. DENY the Farleys’ Motion to Deny Defendant’s Notice of Waiver of Oral Argum ent, ECF. No. 19; and 3. DENY the Farleys’ Motion to Seek Leave for Court to Initiate and Direct an Order for Discovery From Defendants, ECF No. 48 . The Farleys are advised that they m ay appeal the decision of this Court. Under Federal Rules of Appellate Procedure 3 and 4, any written Notice of Appeal m ust be filed with the Clerk of this Court within thirty (30 ) days of the date of entry of this Opinion. Failure to file a tim ely notice of appeal waives the right to an appeal. Let the Clerk send a copy of this Mem orandum Opinion to all counsel of record and the Farleys. ____________________/s/________________ James R. Spencer Senior U. S. District Judge An appropriate Order will issue. ENTERED this 11th day of J une 20 15. 14
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