A class-action lawsuit filed against Wells Fargo Bank NA alleging that the mortgage lender unlawfully “corrected” agreements for thousands of customers’ Wells Fargo home loan terms has now been effectively dismissed.
Plaintiffs accused Wells Fargo of altering maturity date on loans, a change they claim damages home values and marketability for mortgage holders.
The complaint was filed by Philip and Ingrid Tippett of Florida.
The Tippetts claim that Wells Fargo unlawfully changed the maturity dates on their home equity line of credit after realizing it had failed to set that loan to terminate after the mortgages’ final maturity date.
According to the class action lawsuit, failing to adjust these dates would have resulted in the debts becoming unsecured – increasing the bank’s risk that they won’t be paid.
However, rather than informing customers of the mistake so that they could authorize a change, Wells Fargo allegedly took it upon itself to unilaterally file thousands of documents meant to “correct” the maturity dates in order to make them compliment the home equity loans.
These documents are reportedly referred to by Wells Fargo as an “affidavit of correction.”
The class-action lawsuit argues that these changes damage the titles of the homes tied to the mortgages. This damage, in turn, reduces the homes’ property value and marketability, according to the complaint.
These unauthorized changes allegedly constitute a criminal offense under state laws in Michigan, Colorado, California, Florida, Pennsylvania, and possibly other states.
REPORT AND RECOMMENDATION1
Upon referral, this putative class action is before the court on Defendant Wells Fargo Bank, N.A.’s (“Wells Fargo”) motion to dismiss (Doc. 32), to which Plaintiffs have responded (Doc. 37). Wells Fargo filed a reply (Doc. 39), and Plaintiffs filed a sur-reply (Doc. 42). For the reasons explained below, including that Plaintiffs have failed to establish standing to state a claim for declaratory judgment and have also failed to state a claim for quiet title, I recommend that the motion to dismiss be granted.
Simply put, this case arises out of a typographical error.2 That is, Plaintiffs Philip and Ingrid Tippett allege that a mortgage document that was recorded by Wells Fargo pertaining
to their home equity line of credit loan agreement (“HELOC”) had the incorrect date, that Wells Fargo’s attempt to correct it by filing an “Affidavit to Correct a Scrivener’s Error” was done surreptitiously and fraudulently, and that there is now a cloud on the title of their property as a result.
The facts, as alleged in the amended complaint, are as follows. On October 9, 2003, to finance the $125,000 purchase of a home, Plaintiffs Philip and Ingrid Tippett obtained two loans from Wells Fargo: (1) a $100,000 purchase-money loan secured by a first mortgage; and
(2) a $25,000 HELOC loan pursuant to an EquityLine Agreement secured by a HELOC mortgage. (Amended Complaint, Doc. 30, ¶ 19). Depending on the balance at the end of the draw period, the loan balance would either convert to a fully amortizing fixed-rate loan repayable in equal monthly payments for a term of fifteen years (if the unpaid balance was less than $20,000) or thirty years (if the unpaid balance was more than $20,000), with the maturity date being the maturity date of the fixed-rate loan. (Doc. 30, ¶ 20). This is an important aspect of Plaintiffs’ argument, as they contend that the maturity date for the EquityLine Agreement could not be ascertained until the end of the draw period, and only then based on the balance due on the loan. (Doc. 30, ¶¶ 20, 21).
In any event, a HELOC mortgage was prepared and recorded in the public records for Marion County, Florida, that identified October 25, 2013 as the maturity date of the Equity ine Agreement. (Doc 30 ¶ 21, Doc. 30-3, p. 2)). The parties all appear to concede this date was simply an error. Plaintiffs concede that the HELOC mortgage provided that the terms of the EquityLine Agreement controlled over any inconsistent term in the HELOC
mortgage. Under that agreement, depending on the loan balance at the end of the ten year draw period, the maturity date of the EquityLine agreement would have been 2028 (if less than $20,000) or 2043 (if more than $20,000).
This error apparently went unnoticed until 2013. On April 4, 2013, Wells Fargo’s Vice President of Loan Documentation, Joyce Boston, executed and recorded in the public records for Marion County, Florida an “Affidavit of Correction to Correct a Scrivener’s Error,” which states, in part,
“the MATURITY DATE OF THE SECURED DEBT FOR THE SECURITY INTEREST WAS INCORRECTLY TYPED AS 10/25/2013, and that the document was being filed to “correct the MATURITY DATE OF THE SECURED DEBT FOR THE SECURITY INTEREST to show 10/09/2043.”
Plaintiffs take issue with the affidavit’s assignment of a 2043 maturity date because, as they contend, the actual maturity date of the agreement would not have been ascertainable for another six months when the 10-year draw period concluded. Plaintiffs allege that, had their account balance fallen below $20,000 by the end of the draw period, the maturity date would have been 2028, not 2043. (Doc. 30, ¶¶ 20, 34). Plaintiffs allege that Wells Fargo did not notify them or secure their permission to unilaterally and materially alter the terms of their HELOC mortgage and that, therefore, they could not have reasonably discovered the Affidavit of Correction.
Plaintiffs also argue that Wells Fargo purported to hold a lien on their property, but that the lien actually expired no later than October 25, 2018.
Plaintiffs reason that, because the Affidavit of Correction was invalid, Wells Fargo did not properly extend its HELOC mortgage lien past October 25, 2013.
Plaintiffs reach this conclusion by reasoning that, under Florida law, the lien terminated within five years of that date, citing Fla. Stat. § 95.281.
Plaintiffs contend that, because the Affidavit of Correction was filed without the terms of the EquityLine Agreement, Wells Fargo has cast a cloud over their title by purporting to extend the lien to October 9, 2043, when under their theory it expired as a matter of law no later than October 25, 2018. Despite this argument, Plaintiffs also concede that “the maturity date for Plaintiffs’ HELOC loan is October 9, 2043.” (Doc. 30, ¶ 33).
Plaintiffs’ amended complaint seeks to certify a class of “All persons who opened a standard HELOC with Wells Fargo, and for whom Wells Fargo recorded an Affidavit of Correction purporting to extend the maturity date of its security interest in the subject property.” (Doc. 30 para. 37). The amended complaint brings two claims:
(1) quiet title; and
(2) declaratory relief under 28 U.S.C. Sec. 2201 & 2202.
“A pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While detailed factual allegations are not required, “[a] pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. (quoting Twombly, 550 U.S. at 570). The court must view the allegations of the complaint in the light most favorable to the plaintiff, consider the allegations of the complaint as true, and accept all reasonable inferences from there. La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004). In considering the sufficiency of the complaint, the court limits its “consideration to the well-pleaded factual
allegations, documents central to or referenced in the complaint, and matters judicially noticed.” Id.
A claim is plausible on its face where “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. Plausibility means “more than a sheer possibility that a defendant has acted unlawfully.” Id. “Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 557) (internal quotation marks omitted). In short, to survive a motion to dismiss a plaintiff must allege something more “than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (citing Twombly, 550 U.S. at 555).
The Eleventh Circuit uses a two-pronged approach in applying the holding in Ashcroft and Twombly. First, the Court must “eliminate any allegations in the complaint that are merely legal conclusions,” and then, “where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.’” Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 556 U.S. at 679).
A well-pled complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and “that a recovery is very remote and unlikely.” Twombly, 550 U.S. at 556. The issue to be decided when considering a motion to dismiss is not whether the claimant will ultimately prevail, but “whether the claimant is entitled to offer evidence to support the claims.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scheuer, 468 U.S. 183 (1984).
Here, Plaintiffs bring suit under the Declaratory Judgment Act, which provides, in pertinent part:
In a case of actual controversy within its jurisdiction … any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.
28 U.S.C. § 2201(a). “The purpose behind the Declaratory Judgment Act is to afford a new form of relief from uncertainty and insecurity with respect to rights, status, and other legal relations.” Cas. Indem. Exch. v. High Croft Enters., Inc., 714 F. Supp. 1190, 1193 (S.D. Fla. 1989). Specifically, the Act permits actual controversies to be settled before they ripen into violations of law or a breach of contractual duty. Id.
The Declaratory Judgment Act grants to the federal district courts the power to “declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201. An essential element for every declaratory judgment action is the existence of an “actual controversy” between the parties. Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 239–40 (1937). An actual controversy exists when “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941). Ordinarily, a controversy is not sufficiently immediate or real where the parties’ dispute is only hypothetical and not yet ripe, has been rendered moot, or where the court’s resolution of the matter would be purely academic. See Texas v. United States, 523 U.S. 296, 300 (1998); Aetna Life Ins. Co., 300
U.S. at 240–41. On the other hand, a court should permit a claim for declaratory judgment to
proceed where declaratory relief would (1) “serve a useful purpose in clarifying and settling the legal relations in issue,” and (2) “terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.” Volvo Constr. Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581, 594 (4th Cir. 2004).
Wells Fargo moves to dismiss the amended complaint on numerous grounds including that Plaintiffs’ claim for declaratory judgment fails for lack of standing and that all of Plaintiffs’ claims fail under Fed. R. Civ. P. 12(b)(6). The Court will address each of Plaintiffs’ claims in turn.
Wells Fargo argues that Plaintiffs lack standing because they have not alleged facts to support any actual harm. Wells Fargo contends that Plaintiffs have simply alleged in a conclusory manner that they have been somehow harmed by the Affidavit of Correction. In fact, Wells Fargo points out that aligning the parties’ intended maturity date with the recorded date benefitted Plaintiffs because Wells Fargo granted Plaintiffs a longer period of time during which to pay on their mortgage without facing foreclosure.
Wells Fargo argues that, at most, Plaintiffs have alleged a procedural violation – not harm. Wells Fargo contends that such “bare procedural violations” are insufficient to establish standing. See Stacy v. Dollar Tree Stores, Inc. 274 F. Supp. 3d 1355, 1364 (S.D. Fla 2017).
In an attempt to allege an injury to establish a basis for declaratory judgment, Plaintiffs allege that they “remain exposed to a lawsuit by Wells Fargo to foreclose the HELOC mortgage should Plaintiffs default on the loan . . . [and] Plaintiffs are not able to sell or
refinance their property free and clear of the Affidavit of Correction.” (Doc. 30, ¶ 35). Wells Fargo contends that Plaintiffs must plead a substantial likelihood of future injury to establish a claim of declaratory relief, and these allegations are insufficient. Wells Fargo points out that Plaintiffs have only pled “contingent future injuries,” such as exposure to a foreclosure suit if they default, or possible difficulty selling the property or refinancing a mortgage. Notably, Plaintiffs have not alleged they are actually in default, that they are selling their property, or that they are refinancing a mortgage. Wells Fargo contends that these omissions are fatal to their request for declaratory judgment. These contingencies may or may not occur and a “’maybe’ chance is not enough.” See, e.g., Carvalho-Knighton v. Univ. of S. Fla. Bd. Of Trs., 2016 WL 7666137, at *5 (M.D. Fla. Mar. 18, 2016) (“[A] ‘perhaps’ or ‘maybe’ chance is not enough.”).
Moreover, Wells Fargo persuasively argues that no harm can be caused by correcting an error to conform to the parties’ actual understanding and agreement. The Court agrees. First, the undersigned finds it difficult to conceive of the harm alleged by Plaintiffs as anything other than speculative. Any theoretical harm alleged is contingent upon a variety of scenarios such as Plaintiffs’ attempting to sell, refinance, or going into default. Second, and most importantly, even as alleged, the harm would be little more than a clarification of the recorded mortgage to reflect the actual understanding and terms between the parties. That said, the Court acknowledges Plaintiffs’ argument that, at the time the Affidavit of Correction was filed correcting the maturity date to 2043 as to their property, there existed the theoretical possibility that Plaintiffs may have paid down their balance and the maturity date would then have been 2028. Plaintiffs do not allege, however, that this possibility ever came to pass. Rather, it appears that when Wells Fargo filed the Affidavit of Correction in the Tippetts’
case, it did so based on the best information available at the time and, perhaps, made an educated guess about what the maturity date would ultimately be. Plaintiffs have not alleged that, ultimately, the 2043 maturity date turned out to be incorrect based on their balance at the end of the draw period.
Plaintiffs allege that the affidavit is invalid due to the circumstances under which it was filed, but they do not allege that it is incorrect in substance. So, the harm alleged by Plaintiffs is contingent at best, and it appears that the contingencies that may have triggered the alleged harm have not occurred.
And, although the affidavit was filed prior to the end of the draw period, it appears that the draw period did close with the Tippetts’ balance in an amount that aligned with a maturity date of 2043 as provided in the terms of the EquityLine Agreement between the parties.
In other words, under the present circumstances, the Affidavit reflects little more than Wells Fargo’s attempt to clarify a typographical error, and to correct the public records to reflect the actual maturity date under the parties underlying agreement.
To be sure, the events might have unfolded differently. As Plaintiffs point out, the Tippetts might have paid down their balance before the end of the draw period. But that was not the case, and those are not the facts alleged in the amended complaint. The court must consider these issues based on the facts alleged, not the universe of possible facts that may have been alleged.
In the motion and response, the parties have cited cases that are only very loosely analogous to the instant case. In light of the circumstances of this case, and the particular facts alleged in the amended complaint, the undersigned concludes that the Plaintiffs have fallen short of the pleading requirements for an actual controversy, which exists when “there is a substantial controversy, between parties having adverse legal interests, of sufficient
immediacy and reality to warrant the issuance of a declaratory judgment.” Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941). Here, the theoretical harm alleged by Plaintiffs is neither substantial nor sufficiently immediate and real to warrant declaratory judgment.
As the Eleventh Circuit has held, in order to have standing to seek declaratory relief, Plaintiffs “must allege and ultimately prove “a real and immediate – as opposed to a merely hypothetical or conjectural – threat of future injury.” Strickland v. Alexander, 772 F.3d 876, 882 (11th Cir. 2014) (Doc. 30, ¶ 33). To this, Plaintiffs state that they “allege that a cloud exists on their title now,” and that the property’s marketability and value has been reduced without their knowledge. (Doc. 30, ¶ 33). These allegations, however, do not pass the plausibility test under the circumstances, as they amount to bare conclusions regarding the impact of the Affidavit of Correction on the Tippets’ property. See Iqbal, 556 U.S. at 678 (pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’”) (quoting Twombly, 550 U.S. at 555). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. (quoting Twombly, 550 U.S. at 570).
Here, there is no sufficient factual matter to support the conclusion about the property’s alleged reduced value and marketability. And, it seems implausible that the affidavit’s correction of a typographical error that has the effect of bringing the recorded mortgage into alignment with the parties’ actual agreement would have any undue negative impact on the value or marketability of the title. Undoubtedly, such errors occur occasionally and common sense dictates that they would be dealt with as a matter of course by prospective real estate brokers, buyers, mortgage lenders or refinancers, or title insurance representatives. Any impact appears to be hypothetical, as opposed to real and immediate harm. For these
reasons, the undersigned submits that Plaintiffs have failed to establish a real and immediate injury and have therefore failed to establish standing. Consequently, Plaintiffs’ claim for declaratory relief should be dismissed for lack of justiciability.
First, the undersigned observes that Plaintiffs’ quiet title claim fails for lack of standing for the same reasons discussed above. Wells Fargo has also moved to dismiss the amended complaint on the grounds that Plaintiffs’ claims fail under Federal Rule of Civil Procedure 12(b)(6). Wells Fargo also argues that the quiet title claim fails because Plaintiffs have failed to allege all necessary elements.
Under Florida law, in order to state a claim for quiet title, a plaintiff must establish (1) the plaintiff’s valid title; (2) the manner which the plaintiff obtained the title; (3) the basis upon which the defendant asserts an interest on the title; and (4) the invalidity of the defendant’s interest in the property. Barrows v. Bank of Am., NA, 2014 WL 7337429, at *2 (M.D. Fla. Dec. 23, 2014). “A claim for quiet title in Florida ‘must not only show title in the plaintiff to the lands in controversy, but also that a cloud exists, before relief can be given against it.’” Lane v. Guar. Bank, 552 F. App’x 934, 936 (11th Cir.2014) (quoting Stark v. Frayer, 67 So. 2d 237, 239 (Fla. 1953)).
Here, Wells Fargo contends that Plaintiffs cannot show that the defendant’s interest is invalid. Wells Fargo argues, “on the contrary, it is precisely what Plaintiffs agreed to when they executed the agreement for their HELOC in 2003.” (Doc. 32, p. 14). The Court finds this argument persuasive. Plaintiffs certainly dispute the procedure and unilateral nature by which the affidavit was filed in the public records, but they do not dispute its substance. That said, Plaintiffs do affirmatively argue that “[a]ny interest Wells Fargo had in the Tippetts’
property terminated no later than October 25, 2018,” citing ¶ 33 of the amended complaint. (Doc. 30). That paragraph, however, merely recites Plaintiffs’ convoluted and conclusory argument that, under Florida Statutes § 95.281, the lien terminated in 2018. (Doc. 30, ¶ 33). In other words, Plaintiffs’ contention that Wells Fargo’s interest in the property terminated in 2018 is a mere legal conclusion, as opposed to a well-pled factual allegation, and must be eliminated. See Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010).
Plaintiffs do not go so far as to allege that the bank’s interest is invalid. Rather, Plaintiffs stand on their argument that Wells Fargo’s interest terminated in 2018. They largely dispute the procedure and timing of the affidavit and, based on their interpretation of the Florida Statutes regarding mortgage liens, offer the convoluted theory that Wells Fargo unlawfully and “surreptitiously” extended its interest beyond what it originally appeared to be based on the initial incorrect maturity date of 2013. Plaintiffs also allege that Wells Fargo exceeded its authority by unilaterally filing the affidavit without obtaining Plaintiffs’ permission. Yet, all of that is beside the point because Plaintiffs ultimately do not dispute that Wells Fargo has a valid interest and that the Affidavit of Correction was intended to bring the recorded documents into alignment with the parties’ intentions and agreement. See Byrd v. Bank Mortgage Solutions, LLC, 2014 WL 12861313 (S.D. Fla. Apr. 17, 2014), R &R adopted, 2014 12861416 (S.D. Fla. Sept. 8, 2014) (dismissing a quiet title claim and reasoning that the plaintiff did not dispute his agreement or his obligations, but cited a range of legal defects, and finding that the subject mortgage and note did not create an improper or unlawful cloud on this title).
It is worth noting that Plaintiffs admit they “still have a contractual obligation to pay the balance of the loan, even if that debt is not secured by Wells Fargo’s HELOC mortgage.”
(Doc. 37, p. 16). Plaintiffs’ position is perplexing. Despite conceding that they are contractually obligated to pay the loan balance, and that the terms of the “HELOC mortgage provided that the terms of the EquityLine Agreement controlled over any inconsistent term in the HELOC mortgage,” Plaintiffs nonetheless contend that Wells Fargo’s interest in the Tippetts’ property terminated in 2018. (Doc. 37, p. 4, 7, Doc. 30-3, p.7). Plaintiffs’ argument is illogical. Even if the lien recorded in the public records terminated as a matter of fact or procedure, Wells Fargo’s true interest, i.e., the right to a lien against the property was not extinguished because it was established under the EquityLine Agreement. (Doc. 30-2). Notably, Plaintiffs have not cited a single case suggesting that a bank’s filing an Affidavit of Correction or similar document under circumstances such as occurred here is sufficient to establish a claim for quiet title. Indeed, relative to the sufficiency of their quiet title claim, the only case cited by Plaintiffs is Byrd, 2014 WL 12861313, which was cited by Wells Fargo, and which Plaintiffs only cite in an attempt to distinguish it. Simply put, Plaintiffs offer no authority for their proposition that the circumstances of this case are sufficient to support a claim for quiet title.
Meanwhile, an informal survey of Florida law provides examples of cases where a quiet title action was the appropriate vehicle to redress the parties’ dispute. See, e.g.,Bd. of Trustees of Internal Imp. Tr. Fund v. Fla. Pub. Utilities Co., 599 So. 2d 1356, 1357 (Fla. 1st DCA 1992) (quiet title action to determine dispute over ownership of body of water); Brown v. Semple, 204 So. 2d 229, 230 (Fla. 3d DCA 1967) (quiet title action to determine lot boundaries); Jones v. Muldrow, 921 So. 2d 762, 763 (Fla. 1st DCA 2006) (quiet title action to resolve dispute regarding claim based on the theory of boundary by acquiescence). Suffice it to say, neither Plaintiffs nor the Court has identified any precedent that suggests that, in
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circumstances such as presented by the alleged facts in this case, a claim for quiet title is supported.
In reaching the conclusion that Plaintiffs have failed to state claims for quiet title and declaratory judgment, it is not necessary for the Court to decide the multitude of other issues Plaintiffs raise in their amended complaint and pleadings. Those issues include whether the affidavit is an “invalid lien,” whether Plaintiffs’ interpretation of when Wells Fargo’s lien terminated is correct, and whether Wells Fargo violated its authority or the terms of the parties’ contract by unilaterally filing the Affidavit of Correction. Resolution of those issues is not necessary to the Court’s determination that Plaintiffs have failed to state claims for quiet title and declaratory relief.
For the reasons explained above, the Court submits that Plaintiffs’ claims also fail under Rule 12(b)(6). Consequently, the Court need not address Wells Fargo’s additional argument that both of Plaintiffs’ claims are time barred.
As a penultimate matter, the Court notes that Plaintiffs attempt to connect the Affidavit of Correction in this case with “numerous other well-publicized instances” where they contend the bank “has privileged profits over the contracts it has with its customers.” In considering the sufficiency of Plaintiffs’ claims, however, the Court must consider the allegations in the amended complaint, as opposed to the unspecified wrongs to which Plaintiffs allude.
Finally, the undersigned acknowledges that Plaintiffs requested a hearing on the motion to dismiss. The undersigned, however, has determined that a hearing was not necessary in making these recommendations.
For the reasons stated above, I recommend that Wells Fargo Bank, N.A.’s motion to dismiss the amended class action complaint (Doc. 32) be Granted. Plaintiff’s motion for a hearing on the motion to dismiss (Doc. 38) is Denied.
Recommended in Ocala, Florida on June 4, 2021.
PHILIP R. LAMMENS
United States Magistrate Judge
Copies furnished to:
Presiding District Judge
Counsel of Record
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Attorney Lee Segal v. That German Bank and MD Fl. Still Rages On, In This Case.
The judiciary have been moving the motion for sanctions and attorney fees against Segal around the courts and it’s now landed into this case. Once LIF publishes, no doubt it will move again.
Under 28 U.S.C. § 455, a judge must disqualify herself in any proceeding in which her impartiality might reasonably be questioned or if the judge has personal knowledge of disputed evidentiary facts concerning the proceeding.
28 U.S.C. § 455(a) & (b)(1).
When proper grounds exist, a judge has an affirmative and self-enforcing obligation to recuse herself sua sponte.
United States v. Kelly, 888 F.2d 732, 744 (11th Cir. 1989).
Today, I presided over a settlement conference for this case. (Doc. 53).
During the settlement conference, at which the parties reached an impasse, I became privy to certain confidential information.
Consequently, recusal is warranted.
The Clerk is directed to reassign this case to another magistrate judge by random draw and provide notice to the parties of the new magistrate judge.
ORDERED in Tampa, Florida on November 9, 2021.
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U.S. District Court
Middle District of Florida (Tampa)
CIVIL DOCKET FOR CASE #: 8:21-cv-00276-CPT
|BCP Management, LLC v. Deutsche Bank National Trust Company
Assigned to: Magistrate Judge Christopher P. Tuite
Cause: 28:1441 Notice of Removal- Racketeering (RICO)
|Date Filed: 02/02/2021
Date Terminated: 06/08/2021
Jury Demand: Plaintiff
Nature of Suit: 470 Racketeer/Corrupt Organization
|BCP Management, LLC
as Trustee for 11717 81st Place Land Trust
|represented by||Lee Segal
Segal & Schuh Law Group, PL
18167 US Hwy 19 N Ste 100
Clearwater, FL 33764
ATTORNEY TO BE NOTICED
|Deutsche Bank National Trust Company
as Trustee, on behalf of the Registered Holders of GSAMP Trust 2005-HE3, Mortgage Pass-Through Certificates, Series 2005-HE3
|represented by||Benjamin Bruce Brown
Quarles & Brady, LLP
1395 Panther Ln
Naples, FL 34109-7874
ATTORNEY TO BE NOTICEDJoseph T. Kohn
Quarles & Brady, LLP
1395 Panther Ln
Naples, FL 34109-7874
ATTORNEY TO BE NOTICED
|Date Filed||#||Docket Text|
|11/16/2021||56||NOTICE by Deutsche Bank National Trust Company of Impasse at Settlement Conference (Kohn, Joseph) (Entered: 11/16/2021)|
|11/10/2021||55||Case Reassigned to Magistrate Judge Christopher P. Tuite. New case number: 8:21-cv-276-CPT. Magistrate Judge Amanda Arnold Sansone no longer assigned to the case. (JNB) (Entered: 11/10/2021)|
|11/09/2021||54||ORDER of recusal. Signed by Magistrate Judge Amanda Arnold Sansone on 11/9/2021. (SFC) (Entered: 11/09/2021)|
|11/09/2021||53||Minute Entry. Virtual Proceedings held before Magistrate Judge Amanda Arnold Sansone: SETTLEMENT CONFERENCE held on 11/9/2021. Court declares an impasse. (Via Zoom) (CDM) (Entered: 11/09/2021)|
|11/08/2021||52||ENDORSED ORDER taking judicial notice of 32 Exhibits for Defendant’s Motion for Sanctions. Signed by Magistrate Judge Amanda Arnold Sansone on 11/8/2021. (SFC) (Entered: 11/08/2021)|
|11/01/2021||51||ORDER scheduling settlement conference. Settlement Conference set for 11/9/2021 at 10:00 AM in Zoom Video Conference before Magistrate Judge Amanda Arnold Sansone. See order for details. Signed by Magistrate Judge Amanda Arnold Sansone on 11/1/2021. (SFC) (Entered: 11/01/2021)|
|10/29/2021||50||NOTICE by Deutsche Bank National Trust Company re 47 Order directing compliance Amended Joint Notice of Availability for Status Conference (Kohn, Joseph) (Entered: 10/29/2021)|
|10/29/2021||49||NOTICE by Deutsche Bank National Trust Company re 47 Order directing compliance JOINT NOTICE OF AVAILABILITY FOR SETTLEMENT CONFERENCE (Kohn, Joseph) (Entered: 10/29/2021)|
|10/28/2021||48||Minute Entry. Virtual Proceedings held before Magistrate Judge Amanda Arnold Sansone: STATUS CONFERENCE held on 10/26/2021. (Via Zoom) (CDM) (Entered: 10/28/2021)|
|10/26/2021||47||ORDER directing parties to confer re: scheduling a settlement conference for 31 Motion for Sanctions and Attorneys Fees. See order for details. Response due 10/29/2021 at noon. Signed by Magistrate Judge Amanda Arnold Sansone on 10/26/2021. (SFC) (Entered: 10/26/2021)|
|10/07/2021||46||ORDER setting status conference for 10/26/2021 at 02:00 PM in Zoom Video Conference before Magistrate Judge Amanda Arnold Sansone. Signed by Magistrate Judge Amanda Arnold Sansone on 10/7/2021. (SFC) (Entered: 10/07/2021)|
|10/05/2021||45||NOTICE by Deutsche Bank National Trust Company re 44 Order setting status conference JOINT NOTICE OF AVAILABILITY FOR STATUS CONFERENCE (Kohn, Joseph) (Entered: 10/05/2021)|
|10/04/2021||44||ORDER directing parties to confer re: scheduling a status conference for 31 Motion for Sanctions and Attorneys Fees. See order for details. Signed by Magistrate Judge Amanda Arnold Sansone on 10/4/2021. (SFC) (Entered: 10/04/2021)|
|07/22/2021||43||RESPONSE in Opposition re 31 MOTION for Sanctions and Attorney’s Fees Against Lee Segal Personally filed by BCP Management, LLC. (Attachments: # 1 Affidavit Affidavit of Zachary Heathcote)(Segal, Lee) (Entered: 07/22/2021)|
|07/20/2021||42||ORDER denying 41 Motion to Reconsider Order granting in part Motion to File Excess Pages. The plaintiff’s response to the defendant’s 31 Motion for Attorney’s Fees is due by July 23, 2021 and cannot exceed twenty-five pages. Signed by Magistrate Judge Amanda Arnold Sansone on 7/20/2021. (MLM) (Entered: 07/20/2021)|
|07/16/2021||41||First MOTION for Reconsideration re 38 Order on Motion to Stay Order on Motion to File Excess Pages by BCP Management, LLC. (Segal, Lee) Modified on 7/19/2021 to edit text (CRH). (Entered: 07/16/2021)|
|06/28/2021||40||NOTICE of Filing Order by BCP Management, LLC. (Attachments: # 1 Order on Motion to Consolidate Cases)(Segal, Lee) Modified on 6/28/2021 to edit text (CRH). (Entered: 06/28/2021)|
|06/28/2021||39||NOTICE of supplemental authority by BCP Management, LLC. (Segal, Lee) (Entered: 06/28/2021)|
|06/25/2021||38||ORDER denying 36 Motion to Stay Response Deadline; granting in part 37 Motion to File Excess Pages. The plaintiff’s response to the defendant’s 31 Motion for Sanctions is due by July 12, 2021 and cannot exceed twenty-five pages. See order for further details. Signed by Magistrate Judge Amanda Arnold Sansone on 6/25/2021. (MLM) (Entered: 06/25/2021)|
|06/21/2021||37||First MOTION for Leave to File Other Document :Response to Defendant’s Motion for Attorney Fees and/or Sanctions to Exceed 20 Pages by BCP Management, LLC. (Segal, Lee) Modified on 6/22/2021 to change event type (CRH). (Entered: 06/21/2021)|
|06/14/2021||36||Amended MOTION to Stay re 35 Order directing response to motion Order pdf, 31 MOTION for Sanctions and Attorney’s Fees, 34 Notice (Other) Request to Abate Deadlines to Respond Pending Ruling on Motion to Consolidate by BCP Management, LLC. (Segal, Lee) Modified on 6/15/2021 to edit text (CRH). (Entered: 06/14/2021)|
|06/08/2021||35||ORDER dismissing the case for failure to prosecute; directing the Clerk to close the case; and directing the plaintiff to respond to 31 Motion for Sanctions and Attorney’s Fees by June 14, 2021. If no response is received, the defendant’s motion will be treated as unopposed. Signed by Magistrate Judge Amanda Arnold Sansone on 6/8/2021. (MLM) (Entered: 06/08/2021)|
|06/04/2021||34||NOTICE by BCP Management, LLC of Filing (Attachments: # 1 Motion to Consolidate Cases)(Segal, Lee) (Entered: 06/04/2021)|
|05/24/2021||33||ORDER TO SHOW CAUSE as to BCP Management, LLC. See order for details. Signed by Magistrate Judge Amanda Arnold Sansone on 5/24/2021. (MLM) (Entered: 05/24/2021)|
|05/24/2021||32||NOTICE to the Courts to take judicial notice regarding 31 MOTION for Sanctions and Attorney’s Fees Def’s Request for Judicial Notice and Notice of Intent to Use Summaries by Deutsche Bank National Trust Company. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2)(Kohn, Joseph) (Entered: 05/24/2021)|
|05/24/2021||31||MOTION for Sanctions and Attorney’s Fees by Deutsche Bank National Trust Company. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3)(Kohn, Joseph) (Entered: 05/24/2021)|
|04/21/2021||30||ORDER denying 24 Motion to Stay Adjudication of Motion to Quash and Conduct Discovery; granting 6 Motion to Quash Service; and Vacating Default Judgment entered in state court. See order for further details and deadlines. Signed by Magistrate Judge Amanda Arnold Sansone on 4/21/2021. (MLM) (Entered: 04/21/2021)|
|04/15/2021||29||CERTIFICATE of interested persons and corporate disclosure statement by BCP Management, LLC. (Segal, Lee) (Entered: 04/15/2021)|
|04/15/2021||28||NOTICE of a related action per Local Rule 1.07(c) by BCP Management, LLC. Related case(s): No (Segal, Lee) (Entered: 04/15/2021)|
|04/12/2021||27||RESPONSE in Opposition re 24 MOTION to Stay re 21 Response in Opposition to Motion Adjudication of Motion to Quash, Motion to Allow Subpoena Duces Tecum to CT, Compel Deposition filed by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 04/12/2021)|
|04/06/2021||26||NOTICE by Deutsche Bank National Trust Company re 18 Notice (Other) of Filing Order Denying Consolidation for Purposes of Appeal (Attachments: # 1 Exhibit)(Kohn, Joseph) (Entered: 04/06/2021)|
|04/06/2021||25||NOTICE of supplemental authority re 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 04/06/2021)|
|03/29/2021||24||MOTION to Stay re 21 Response in Opposition to Motion Adjudication of Motion to Quash, Motion to Allow Subpoena Duces Tecum to CT, Compel Deposition by BCP Management, LLC. (Segal, Lee) (Entered: 03/29/2021)|
|03/28/2021||23||NOTICE by BCP Management, LLC re 21 Response in Opposition to Motion of Reyes Affidavit Admitting Office (Attachments: # 1 Exhibit)(Segal, Lee) (Entered: 03/28/2021)|
|03/28/2021||22||NOTICE by BCP Management, LLC re 21 Response in Opposition to Motion of Affidavit of Lior Segal (Attachments: # 1 Exhibit)(Segal, Lee) (Entered: 03/28/2021)|
|03/26/2021||21||RESPONSE in Opposition re 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment filed by BCP Management, LLC. (Segal, Lee) (Entered: 03/26/2021)|
|03/17/2021||20||ENDORSED ORDER granting 19 Motion for Extension of Time to File a Response to the defendant’s 6 Motion to Quash Service of Process and Motion to Vacate Clerk’s Default and Default Judgment. The plaintiff’s response is due by March 26, 2021. Signed by Magistrate Judge Amanda Arnold Sansone on 3/17/2021. (MLM) (Entered: 03/17/2021)|
|03/17/2021||19||First MOTION for Extension of Time to File Response/Reply as to 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment, 17 Order directing response to motion to Defendant’s Motion to Quash Service & Incorporated Memorandum of Law by BCP Management, LLC. (Segal, Lee) (Entered: 03/17/2021)|
|03/17/2021||18||NOTICE by BCP Management, LLC of Filing (Attachments: # 1 Motion to Consolidate Cases)(Segal, Lee) (Entered: 03/17/2021)|
|03/11/2021||17||ENDORSED ORDER directing the plaintiff to respond to the defendant’s 6 Motion to Quash Service of Process and Motion to Vacate Clerk’s Default and Default Judgment. The plaintiff’s response is due by March 19, 2021. If no response is received, the defendant’s motion will be treated as unopposed. Signed by Magistrate Judge Amanda Arnold Sansone on 3/11/2021. (MLM) (Entered: 03/11/2021)|
|03/09/2021||16||ORDER approving Consent to Jurisdiction by US Magistrate Judge. Case reassigned to Magistrate Judge Amanda Arnold Sansone. Signed by Judge Charlene Edwards Honeywell on 3/9/2021. (BGS) (Entered: 03/09/2021)|
|03/09/2021||15||NOTICE of supplemental authority re 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment (Second Notice) by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 03/09/2021)|
|03/09/2021||14||CONSENT to trial by U.S. Magistrate Judge by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 03/09/2021)|
|03/09/2021||13||CASE MANAGEMENT REPORT. (Kohn, Joseph) (Entered: 03/09/2021)|
|03/03/2021||12||NOTICE of a related action per Local Rule 1.07(c) by Deutsche Bank National Trust Company. Related case(s): Yes (Attachments: # 1 Exhibit)(Kohn, Joseph) (Entered: 03/03/2021)|
|03/01/2021||11||NOTICE informing the parties that they may consent to the jurisdiction of a United States magistrate judge by filing Form AO 85 Notice, Consent, and Reference of a Civil Action to a Magistrate Judge using the event Consent to Jurisdiction of US Magistrate Judge. (Signed by Deputy Clerk). (BGS) (Entered: 03/01/2021)|
|03/01/2021||10||NOTICE to Counsel of Local Rule 1.07(c), Local Rule 3.02(a)(2), and Local Rule 3.03.
-Local Rule 1.07(c) requires lead counsel to promptly file a Notice of a Related Action that identifies and describes any related action pending in the Middle District.
-Local Rule 3.02(a)(2) requires the parties in every civil proceeding, except those described in subsection (d), to file a case management report (CMR) using the uniform form at www.flmd.uscourts.gov. The CMR must be filed (1) within forty days after any defendant appears in an action originating in this court, (2) within forty days after the docketing of an action removed or transferred to this court, or (3) within seventy days after service on the United States attorney in an action against the United States, its agencies or employees. Judges may have a special CMR form for certain types of cases. These forms can be found at www.flmd.uscourts.gov under the Forms tab for each judge.
-Local Rule 3.03 requires each party to file a disclosure statement with the first appearance that identifies (1) each person that has or might have an interest in the outcome, (2) each entity with publicly traded shares or debt potentially affected by the outcome, (3) each additional entity likely to actively participate, and (4) each person arguably eligible for restitution. The disclosure statement must include this certification – I certify that, except as disclosed, I am unaware of an actual or potential conflict of interest affecting the district judge or the magistrate judge in this action, and I will immediately notify the judge in writing within fourteen days after I know of a conflict. (Signed by Deputy Clerk). (BGS) (Entered: 03/01/2021)
|02/26/2021||9||NOTICE of filing of affidavit in opposition to re 7 Notice of filing supplemental authority, 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment by BCP Management, LLC (Attachments: # 1 Affidavit of Michael Roth)(Segal, Lee) Modified text on 3/1/2021 (MCB). (Entered: 02/26/2021)|
|02/26/2021||8||NOTICE of filing of affidavit in opposition to re 7 Notice of filing supplemental authority, 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment by BCP Management, LLC (Attachments: # 1 Affidavit of Michael Levey)(Segal, Lee) Modified text on 3/1/2021 (MCB). (Entered: 02/26/2021)|
|02/23/2021||7||NOTICE of supplemental authority re 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 02/23/2021)|
|02/22/2021||6||MOTION to Quash Service of Process , MOTION to Vacate Clerk’s Default and Default Judgment by Deutsche Bank National Trust Company. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18)(Kohn, Joseph) Motions referred to Magistrate Judge Amanda Arnold Sansone. (Entered: 02/22/2021)|
|02/08/2021||5||CORPORATE Disclosure Statement by Deutsche Bank National Trust Company identifying Corporate Parent Deutsche Bank Holdings, Inc., Corporate Parent Deutsche Bank Trust Corporation, Corporate Parent DB USA Corporation for Deutsche Bank National Trust Company.. (Kohn, Joseph) (Entered: 02/08/2021)|
|02/04/2021||4||ORDER transferring case to Tampa Division. Signed by Judge Anne C. Conway on 2/4/2021. (copies mailed/emailed)(AKC) (Entered: 02/04/2021)|
|02/03/2021||3||INITIAL CASE ORDER – Notice of Local Rule 3.02(a)(2), which requires the parties in every civil proceeding, except those described in subsection (d), to file a case management report (CMR) using the uniform form at www.flmd.uscourts.gov. The CMR must be filed (1) within forty days after any defendant appears in an action originating in this court, (2) within forty days after the docketing of an action removed or transferred to this court, or (3) within seventy days after service on the United States attorney in an action against the United States, its agencies or employees. Counsel have 14 days from the date of this order to file their disclosure statement (if not already filed) and to notify the court of a related action (not required if there are no related actions). Signed by Judge Anne C. Conway on 2/3/2021. (copies mailed/emailed)(AKC) (Entered: 02/03/2021)|
|02/02/2021||2||NEW CASE ASSIGNED to Judge Anne C. Conway and Magistrate Judge Embry J. Kidd. New case number: 6:21-cv-0223-ACC-EJK. (SJB) (Entered: 02/02/2021)|
|02/02/2021||1||COMPLAINT and NOTICE OF REMOVAL from 18th Judicial Circuit Brevard County Florida, case number 20-CA-47023 filed in State Court on 10/19/2020. (Filing Fee $402, Receipt # 113A-17839186) filed by Deutsche Bank National Trust Company. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit, # 5 Exhibit, # 6 State Court COMPLAINT, # 7 State Court Other Documents, # 8 State Court Other Documents, # 9 State Court Docket Sheet, # 10 Civil Cover Sheet)(Kohn, Joseph) Modified on 2/2/2021 to correct docket text(SJB). Modified on 2/3/2021 (MEJ). (Entered: 02/02/2021)|
PPP Fraud Sentencing: In Florida an NFL Player Receives 3 Years. In Texas, a Regular Joe, 9 Years.
Former NFL player Josh Bellamy $1.2m PPP Loan Fraud versus $1.6m by Texas citizen Lee Price III, receives 3x the sentence, for the same crime and practically the same financial sum.
Ex-NFL player Bellamy gets 3 years for COVID relief fraud
DEC 13, 2021 | REPUBLISHED BY LIT: DEC 14, 2021
TAMPA, Fla. (AP) — Former NFL player Josh Bellamy has been sentenced to three years and one month in federal prison for fraudulently obtaining over $1.2 million in COVID-19 relief funds.
Bellamy, 32, of St. Petersburg, Florida, was sentenced Friday in Tampa federal court, according to court records. He pleaded guilty in June to conspiracy to commit wire fraud. Besides serving prison time, Bellamy must also pay restitution.
Bellamy most recently played for the New York Jets, who released him from the reserve/physically unable to play list in September 2020, just days before his arrest.
The wide receiver had been placed on the list in May of that year, ending his season before it began. He signed a two-year deal worth $5 million with New York in 2019 and played in seven games before injuring a shoulder and being placed on the season-ending injured reserve list.
According to court records, Bellamy obtained a Paycheck Protection Program loan of $1.2 million for his company, Drip Entertainment LLC, using falsified documents and false information.
Bellamy admitted to using the loan proceeds on personal items, such as jewelry and a stay at the Seminole Hard Rock Hotel and Casino.
Bellamy also sought loans on behalf of his family members and close associates.
Compare $1.6 million dollar loan fraud to $50 million pump n dump scheme and y’all know stealin’ from citizens is the way to get off with a low sentence, if at all in Texas, just remember who to thank. #txlege #retirementplanning https://t.co/qYkwNKfJrL pic.twitter.com/uIbsIgNKgu
— LawsInTexas (@lawsintexasusa) December 13, 2021
Texas man who bought Lamborghini with $1.6 million PPP loan sentenced to 9 years in prison
NOV 30, 2021 | REPUBLISHED BY LIT: DEC 14, 2021
HOUSTON, Texas — A Houston businessman was sentenced to nine years in prison for a scheme in which he obtained and laundered more than $1.6 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
According to the U.S. Attorney’s office, 30-year-old Lee Price III, who pleaded guilty to wire fraud and money laundering charges, submitted fraudulent PPP applications to banks and other lenders on behalf of three entities: 713 Construction LLC, Price Enterprises Holdings LLC, and Price Logistic Services LLC.
Through the applications, Price sought over $2.6 million and obtained $1.6 million.
The applications allegedly stated each entity had numerous employees and significant payroll expenses. In addition, Price put down the name of a person who died shortly before the application was submitted.
After receiving the money, Price used the money on a Lamborghini Urus, a Ford F-350 truck, a Rolex watch, and to pay off a loan on a residential property. He also spent thousands at strip clubs and other Houston nightclubs.
Price was arrested and charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions. He pleaded guilty in September to wire fraud and money laundering charges.
The CARES Act was enacted in March to provide emergency financial assistance for Americans due to the COVID-19 pandemic. Congress authorized more than $300 billion in additional PPP funding.
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United States Court of Appeals
For the Eleventh Circuit
JAMES BUCKMAN, MAURICE SYMONETTE,
LANCASTER MORTGAGE CO.,
DEUTSCHE BANK NATIONAL TRUST CO.,
as Trustee under the pooling and servicing agreement series rast 2006-A8,
SECURITY AND EXCHANGE COMMISSION,
ONE WEST BANK, et al.,
OCT 7, 2021 | REPUBLISHED BY LIT: OCT 7, 2021
Appeal from the United States District Court for the Southern District of Florida
D.C. Docket No. 1:19-cv-24184-MGC
Before JILL PRYOR, BRANCH, and LUCK, Circuit Judges. PER CURIAM:
James Buckman and Maurice Symonette (“Buckman and Symonette”) appeal from the district court’s dismissal with prejudice of their second amended complaint as an impermissible shotgun pleading.
They argue that the district court erred and demonstrated bias by dismissing their case because they had filed a motion for an additional three-day extension of time and the district court provided a window for responses to the motion by the defendants, but then dismissed the case before the responses were due.1
After review, we affirm.
In October 2019, Buckman and Symonette filed a pro se 45-page complaint against eight defendants including numerous banks, a mortgage company, the Security and Exchange Commission, the U.S. Treasury, and other entities, raising numerous claims including:
(1) quiet title;
(2) slander of title;
(3) unjust enrichment;
(4) violations of the Real Estate Settlement Procedures Act;
(5) fraud and concealment;
(6) violation of timely assignment and lack of consideration;
(7) various violations of several Florida statutes.
Thereafter, in December 2019, Buckman and Symonette filed a 51-page amended complaint asserting a total of 11 causes of action.
On July 24, 2020, the district court, sua sponte, struck the amended complaint as an impermissible shotgun pleading.
The district court set forth the pleading rules in its order, and provided that the plaintiffs had until July 31, 2020 to file a second amended complaint.
The district court emphasized that, in the second amended complaint, Plaintiffs are required to make a “short and plain statement of the claim showing that the pleader is entitled to relief . . .”
Fed. R. Civ. P. 8(a).
Plaintiffs must also state each theory of liability separately “in numbered paragraphs, each limited as far as practicable to a single set of circumstances.”
Fed. R. Civ. P. 10(b).
The newly amended complaint should clearly delineate which factual allegations and cited laws are relevant to the asserted cause of action.
This includes specifying which Defendant is liable under each cause of action and which Defendant is implicated in each factual allegation.
Failure to comply with this Order may result in the dismissal of this case with prejudice or other appropriate sanctions.
On July 31, 2020, the plaintiffs filed a motion for an extension of time to file their second amended complaint. The district court granted the motion and ordered that the second amended com- plaint be filed on or before August 6, 2020.
On August 6, 2020, the plaintiffs filed a motion seeking three more days to file their second amended complaint. On the same date, after filing their extension motion, they filed their second amended complaint.
The 92-page second amended complaint added 4 new causes of action and suffered from many of the same issues as the first amended complaint.
On August 17, 2020, the district court dismissed with prejudice the second amended complaint explaining that the second amended complaint “does not cure the defects that required striking of the initial Complaint.”
This appeal followed.2
Buckman and Symonette argue that the district court erred and demonstrated bias when it dismissed their case with prejudice while their motion for extension of time was pending.
Specifically, they argue that the district court docketed their motion for a three- day extension of time to file the second amended complaint and set “responses due by 8/20/2020,” but then dismissed the case before that date.
They also raise arguments related to the merits of their underlying claims.
The district court did not err in dismissing the case. On the day the second amended complaint was due, Buckman and Symonette filed the request for a three-day extension of time, but they then filed a second amended complaint the same day.
The filing of the second amended complaint on the day it was due mooted the motion for an extension of time and the related re- sponse period.
Once the second amended complaint was filed, there was nothing left for the district court to do except review the complaint to determine whether the plaintiffs corrected the previously identified pleading issues.
To the extent that Buckman and Symonette’s brief could be liberally construed as challenging the district court’s dismissal of the second-amended complaint as an impermissible shotgun pleading, we review the district court’s decision for abuse of discretion.
Barmapov v. Amuial, 986 F.3d 1321, 1324 (11th Cir. 2021); see also Tannenbaum v. United States, 148 F.3d 1262, 1263 (11th Cir. 1998)
(“Pro se pleadings are held to a less stringent standard than pleadings drafted by attorneys and will, therefore, be liberally construed.”).
“A shotgun pleading is a complaint that violates either Federal Rule of Civil Procedure 8(a)(2) or Rule 10(b), or both.”
Barmapov, 986 F.3d at 1324.
Rule 8 requires that the complaint set forth “a short and plain statement of the claim” demonstrating an entitlement to relief, and Rule 10 requires that a plaintiff “state [his] claims in numbered paragraphs, each limited as far as practicable to a single set of circumstances.”
Fed. R. Civ. P. 8(a)(2) and 10(b).
Rule 10 further provides that each claim be stated in separate counts “[i]f doing so would promote clarity.” Id. R. 10(b).
We have repeatedly condemned the use of shotgun pleadings.
See Barmapov, 986 F.3d at 1324; Magluta v. Samples, 256 F.3d 1282, 1284 (11th Cir. 2001).
When a plaintiff files a shotgun pleading, a district court must give him one chance to replead before dismissing his case with prejudice on shotgun pleading grounds.
Vibe Micro, Inc. v. Shabanets, 878 F.3d 1291, 1295–96 (11th Cir. 2018).
The district court should explain how the pleading violated the shotgun rule so that the plaintiff can remedy his next pleading.
Where, as here, the plaintiff is provided fair notice of the specific defects in his complaint and a meaningful chance to fix it but fails to correct the defects, the district court does not abuse its discretion by dismissing with prejudice on shotgun pleading grounds.
Jackson v. Bank of Am., N.A., 898 F.3d 1348, 1358–59 (11th Cir. 2018).
Accordingly, the district court did not abuse its discretion in dismissing the second amended complaint with prejudice because Buckman and Symonette failed to correct the pleading defects.
Consequently, we affirm.
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