Andrews v. Ditech Mortgage Corp., Ditech Financial Llc

MOTION to Dismiss for Lack of Jurisdiction with Roseboro,.

E.D. Va.October 10, 2016

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA --------------------------------------------------------X CLARENCE ANDREWS, JR., Plaintiff, - against - DITECH FINANCIAL LLC, DITECH MORTGAGE CORP. Defendants. No. 3:16-CV-00631 ------------------------------------------------------X DEFENDANTS DITECH FINANCIAL LLC AND DITECH MORTGAGE CORP.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Defendants, Ditech Financial LLC and Ditech Mortgage Corp. (collectively, “Ditech”), by counsel, hereby submit their Motion to Dismiss Plaintiff’s Complaint pursuant to Fed. R. Civ. P. 12(b)(1) and (6). For the reasons set forth in the accompanying Memorandum of Law in Support of Ditech’s Motion to Dismiss, the Court should grant Ditech’s Motion to Dismiss and dismiss with prejudice Plaintiff Clarence Andrews’ Complaint. WHEREFORE, Ditech respectfully requests that the Court issue an Order granting Ditech’s Motion to Dismiss and dismissing with prejudice Plaintiff’s Complaint against Ditech. Case 3:16-cv-00631-JAG Document 6 Filed 10/10/16 Page 1 of 4 PageID# 22 2 Dated: October 10, 2016 Respectfully submitted, s/ Jon S. Hubbard Jon S. Hubbard (VSB No. 71089) Sarah Warren Smith (VSB No. 81867) TROUTMAN SANDERS LLP 1001 Haxall Point Richmond, Virginia 23219 Telephone: (804) 697-1407 Facsimile: (804) 697-1339 E-mail: jon.hubbard@troutmansanders.com Counsel for Ditech Financial, LLC and Ditech Mortgage Corp. Case 3:16-cv-00631-JAG Document 6 Filed 10/10/16 Page 2 of 4 PageID# 23 3 LOCAL RULE 7(K) WARNING Please take notice that pursuant to Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975): (1) You are entitled to file a response opposing Defendants’ Motion to Dismiss and Memorandum in Support. Any such response must be filed within twenty-one (21) days of the date on which the dispositive or partially dispositive motion is filed; and (2) The Court could dismiss the action on the basis of the Defendants’ papers if you do not file a response; and (3) You must identify all facts stated by Defendants with which you disagree and must set forth your version of the facts by offering affidavits (written statements signed before a notary public and under oath) or by filing sworn statements (bearing a certificate that it is signed under penalty of perjury); and (4) You are also entitled to file a legal brief in opposition to the one filed by Defendants. Case 3:16-cv-00631-JAG Document 6 Filed 10/10/16 Page 3 of 4 PageID# 24 429373475 CERTIFICATE OF SERVICE I certify that on the 10th day of October, 2016, I electronically filed the foregoing document with the Clerk of the Court using the CM/ECF System, and also served a copy of such filing on the following via U.S. Mail, postage prepaid: Plaintiff Pro Se Clarence Andrews, Jr. 1819 Bedford Street Petersburg, Virginia 23803 (804) 862-1374 s/ Jon S. Hubbard Jon S. Hubbard (VSB No. 71089) Sarah Warren Smith (VSB No. 81867) TROUTMAN SANDERS LLP 1001 Haxall Point Richmond, Virginia 23219 Telephone: (804) 697-1407 Facsimile: (804) 697-1339 E-mail: jon.hubbard@troutmansanders.com sarahwarren.smith@troutmansanders.com Counsel for Ditech Financial, LLC and Ditech Mortgage Corp. Case 3:16-cv-00631-JAG Document 6 Filed 10/10/16 Page 4 of 4 PageID# 25 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA --------------------------------------------------------X CLARENCE ANDREWS, JR., Plaintiff, - against - DITECH FINANCIAL LLC, DITECH MORTGAGE CORP. Defendants. No. 3:16-CV-00631 ------------------------------------------------------X DITECH FINANCIAL, LLC’S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S COMPLAINT Defendants, Ditech Financial LLC (“Ditech Financial”) and Ditech Mortgage Corp. (“Ditech Mortgage”)1 (collectively, “Ditech”), by counsel and pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), submits this Memorandum of Law in Support of its Motion to Dismiss Plaintiff Clarence Andrews, Jr.’s (“Plaintiff”) Complaint. INTRODUCTION This case arises out of Plaintiff’s review of an article which has seemingly prompted him to file the present claim against Ditech, which seeks to hold Ditech criminally responsible for various violations of the Virginia Constitution, Virginia Code, and the U.S. Code. Not only does the Court lack subject matter jurisdiction to hear the allegations in what amounts to a criminal complaint brought by an individual seeking unspecified relief, but the Complaint is entirely devoid of any factual allegations of wrongdoing by Ditech to support any cause of action, if any cited law were even available to Plaintiff. Therefore, because Plaintiff lacks subject matter 1 While Plaintiff does not address the relationship of either defendant to each other or Plaintiff’s mortgage loan, Ditech offers the following clarification: Effective August 31, 2015, Ditech Mortgage merged with Green Tree Servicing, LLC. Green Tree Servicing, LLC immediately changed its name to Ditech Financial, LLC. Case 3:16-cv-00631-JAG Document 6-1 Filed 10/10/16 Page 1 of 10 PageID# 26 2 jurisdiction and his Complaint fails to allege any facts supporting his position, Ditech requests that this Court dismiss Plaintiff’s Complaint with prejudice. STATEMENT OF FACTS AS ALLEGED IN THE COMPLAINT Plaintiff entered into a mortgage loan in June, 1988, with Dominion Mortgage Group. (Compl. ¶ 1). Plaintiff asserts that the interest rate in this mortgage contract was manipulated. (Compl., ¶ 2). Bank of America purchased the loan in 2011, and sold Plaintiff’s loan to Green Tree (now known as Ditech) in 2015. (Compl., ¶ 1). Bank of America was convicted of some unidentified crime, and Ditech is therefore liable to Plaintiff for a “federal crime of fraud on the homeowners of America.” (Compl., ¶ 1). LEGAL ARGUMENT I. Standard of Review. “If a court finds that it does not have subject matter jurisdiction over the case or controversy, it must dismiss the action.” Rashad v. Jenkins, No. 3:15-cv-655, 2016 U.S. Dist. LEXIS 27879, at *10 (E.D. Va. Mar. 3, 2016) (citing Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006)). “Of course, the plaintiff bears the burden of establishing that federal jurisdiction is proper.” Id. (citing Warren v. Sessoms & Rogers, P.A., 676 F.3d 365, 371 (4th Cir. 2012)). Challenges to subject matter jurisdiction may be made in two ways. First, a facial challenge to jurisdiction may be made by arguing that the complaint does not allege facts that permit the exercise of federal subject matter jurisdiction.” Id. (citing Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009)). If that type of challenge is raised, the court must assume that all facts alleged in the complaint are true. Id. Second, the challenge can be made under the theory that the complaint’s assertion of subject matter jurisdiction is not true. Id. (quoting Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). In that event, a court may consider evidence outside the pleadings. Id. Id. Case 3:16-cv-00631-JAG Document 6-1 Filed 10/10/16 Page 2 of 10 PageID# 27 3 Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a complaint if the plaintiff has failed to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6); Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 554 (2007). While the court will assume the asserted facts as true, the complaint must contain sufficient facts to “state a claim to relief that is plausible on its face.” Clear Sky Car Wash, LLC v. City of Chesapeake, 910 F. Supp. 2d 861, 870 (E.D. Va. 2012) (quoting Twombly, 550 U.S. at 547). Plaintiff is, therefore, required to plead facts sufficient to allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 at 663 (quoting Twombly, 550 U.S. at 570). Thus, the plaintiff must demonstrate “more than a sheer possibility that the defendant has acted unlawfully.” Id. Furthermore, a motion for dismissal should be granted if the complaint consists merely of “a formulaic recitation of the elements of a cause of action” or “naked assertion[s]” without “further factual enhancement.” Twombly, 550 U.S. at 555, 557. II. The Court Lacks Subject Matter Jurisdiction. From what can be extrapolated from Plaintiff’s Complaint, Plaintiff wants Ditech to be found “guilty of the crime [it] committed” and believes himself to be a “crime victim.” (Compl., p. 1-2). Plaintiff has filed a criminal complaint and seeks to hold Ditech criminally responsible for violations of various criminal statutes (specifically for violations of 18 U.S.C. §§ 241 and 3771, and Virginia Code § 18-178 and § 19.2-11.01). These criminal statutes may not be pursued by an individual, and Plaintiff’s Complaint therefore lacks subject matter jurisdiction and should be dismissed with prejudice. This Court recently dismissed a similar Complaint purporting to allege criminal violations for lack of subject matter jurisdiction. In Hobbs v. Ditech, 3:16-cv-00687 (E.D. Va. Case 3:16-cv-00631-JAG Document 6-1 Filed 10/10/16 Page 3 of 10 PageID# 28 4 Sept. 16, 2016), the Court reviewed the plaintiff’s Complaint, which asserted the same statutory violations in a nearly identical pleading, and dismissed the Complaint for lack of subject matter jurisdiction. (A copy of the Order is attached as Exhibit A). The Court’s recent dismissal of these same violations in the same factual context fortifies the propriety of dismissal of this action. This Court lacks subject-matter jurisdiction over all of Plaintiff’s claims. A review of the specific allegations that Plaintiff cites highlights the criminal nature of Plaintiff’s Complaint. At the outset, Virginia Code § 18-178 was repealed in 1960 (Acts of Assembly ch. 358, 1960) and, therefore, is not a proper basis to hold Ditech responsible. To the extent Plaintiff intended to reference section 18.2-178 of the Virginia Code, Obtaining money or signature, etc., by false pretense, the statute only identifies that a violation may be redressed by a criminal penalty. Plaintiff also alleges that Ditech violated Virginia’s Crime Victims and Witness Rights Act, Va. Code § 19.2-11.01. This statute prescribes procedures to follow with respect to the treatment of crime victims and witnesses; it is not a statute that may form the basis of either a civil or criminal complaint. Similarly, Plaintiff cites to 18 U.S.C. § 3771 prescribing Crime victims’ rights, and the Virginia equivalent located in Article I, Section 8-A of the Virginia Constitution. Again, these authorities identify rights afforded to victims of crime; they are not independent causes of action against a corporation and do not provide civil relief. Finally, Plaintiff identifies 18 U.S.C. § 241 as a statute Ditech purportedly violated. Again, 18 U.S.C. § 241 addresses criminal conspiracies, identifies those crimes that constitute a violation as kidnapping, aggravated sexual assault, and murder, and only prescribes criminal penalties. Plaintiff cannot seek relief premised on violations of criminal laws. See Boruski v. Stewart, 381 F. Supp. 529 (S.D.N.Y. 1974) (finding that plaintiff’s civil suit based on theory that defendants violated federal criminal statutes does not present a federal question which would Case 3:16-cv-00631-JAG Document 6-1 Filed 10/10/16 Page 4 of 10 PageID# 29 5 give the court subject matter jurisdiction); Khan v. Bank of N.Y. Mellon, 525 F. App’x 778, 781 (10th Cir. 2013) (noting that “18 U.S.C. § 1005 creates a criminal offense, not a federal cause of action that appellants can pursue. Therefore, this statute does not provide a basis for federal- question jurisdiction under § 1331”). Where none of the criminal statutes cited by a plaintiff in federal court provide for applicable civil remedies, as in this case, plaintiff’s complaint must be dismissed. Carr v. Va. Dep’t of Veterans Servs., Civil Action No. 3:13cv335, 2014 U.S. Dist. LEXIS 48507, at *4 (E.D. Va. Apr. 7, 2014); Krupnick v. Union Nat’l Bank, 470 F. Supp. 1037 (W.D. Pa. 1979). Furthermore, as discussed in the United States Supreme Court decision in Leeke v. Timmerman, pubic persons do not have the right of private prosecution. Leeke v. Timmerman, 454 U.S. 83, 87 (1981) (noting that the decision to prosecute is within the prosecutor’s discretion). Like in Leeke, Plaintiff attempts to initiate a private prosecution against Ditech—a right Plaintiff does not have. III. Plaintiff Fails to Allege Any Facts Supporting the Alleged Violations Contained in Plaintiff’s Complaint. The only allegation not prescribing criminal penalties are Plaintiff’s citation to Virginia Code § 6.2-203. Plaintiff’s Complaint is not only confusing but fails to allege a cognizable cause of action against Ditech. However, Plaintiff’s Complaint does not contain a single factual allegation against Ditech, and it is insufficient to withstand the pleading requirements required by Twombly and Iqbal. Plaintiff’s entire Complaint is premised on an irrelevant press release written by the Department of Justice that he does not attach to the Complaint. Plaintiff alleges that he is a “[d]efrauded [m]ortgagor” who used “[f]radulent and [voided] ‘financial instruments.” (Compl. ¶ 2). However, Plaintiff does not identify that Ditech had any involvement or was even Case 3:16-cv-00631-JAG Document 6-1 Filed 10/10/16 Page 5 of 10 PageID# 30 6 identified in this press release. The thrust of his Complaint appears to be that he believes that the interest rate on his mortgage loan, which he entered into with Dominion Mortgage Group in 1988, was manipulated and the loan agreement is therefore void. Plaintiff asserts that this conduct is a violation of Virginia Code § 6.2-203, which discusses the effect of illegal currency dealing, trade, or business. However, interest rates on a mortgage loan are not currency, which is defined as an “item (such as a coin, government note, or banknote) that circulates as a medium of exchange.” Black’s Law Dictionary, p. 411 (8th Ed. 2004). Moreover, Plaintiff does not allege with any specificity what Ditech did to violate Virginia Code § 6.2-203. Failure to provide any facts substantiating Plaintiff’s vague claims is exactly what Twombly intended to prevent at the pleading stage. Plaintiff’s Complaint even fails to contain a formulaic recitation of the elements of a cause of action. It does, however, contain naked assertions that Ditech violated irrelevant federal and state statutes for engaging in an act which Ditech—according to the article cited by Plaintiff—did not do. Plaintiff’s pro se status does not protect Plaintiff from the pleading requirements mandated under the Federal Rules of Civil Procedure Rule 12. Jones v. Imaginary Images, Inc., No. 3:12-CV-217, 2012 U.S. Dist. LEXIS 111682, at *12 (E.D. Va. Aug. 8, 2012) (“[A] court must still evaluate the pro se plaintiff’s pleadings according to the standards developed under Rule 12.”). Where the Plaintiff’s Complaint fails to contain any cognizable assertions of wrongdoing by Ditech, the court is under no obligation to allow Plaintiff’s case to proceed. See Manship v. Brothers, No. 1:11cv1003 (JCC/JFA), 2011 U.S. Dist. LEXIS 148271, at *16 (E.D. Va. Dec. 27, 2011). Under the standard for a motion to dismiss, a court is to ignore the conclusory assertions by the litigant. Twombly, 550 U.S. at 555, 557; Worthington v. Palmer, Civil Action No. Case 3:16-cv-00631-JAG Document 6-1 Filed 10/10/16 Page 6 of 10 PageID# 31 7 3:15cv410, 2015 U.S. Dist. LEXIS 159441, at *10 (E.D. Va. Nov. 24, 2015) (“Twombly and Iqbal also made clear that the analytical approach for evaluating Rule 12(b)(6) motions to dismiss requires courts to reject conclusory allegations”). Following this rule, Plaintiff’s Complaint would only consist of a discussion of the history of Plaintiff’s mortgage, contained in Paragraph One of the Complaint and nothing more. Therefore, for the foregoing reasons, Plaintiff’s Complaint fails to allege any violations of any act, and the Court should dismiss Plaintiff’s Complaint with prejudice. CONCLUSION WHEREFORE, Defendant Ditech Financial LLC, respectfully requests that the Court grant its Motion to Dismiss Plaintiff’s claims with prejudice, and granting Defendant any such further relief as the Court deems just and proper. Respectfully submitted this 10th day of October, 2016. s/ Jon S. Hubbard Jon S. Hubbard (VSB No. 71089) Sarah Warren Smith (VSB No. 81867) TROUTMAN SANDERS LLP 1001 Haxall Point Richmond, Virginia 23219 Telephone: (804) 697-1407 Facsimile: (804) 697-1339 E-mail: jon.hubbard@troutmansanders.com sarahwarren.smith@troutmansanders.com Counsel for Ditech Financial, LLC and Ditech Mortgage Corp. Case 3:16-cv-00631-JAG Document 6-1 Filed 10/10/16 Page 7 of 10 PageID# 32 8 CERTIFICATE OF SERVICE I certify that on the 10th day of October, 2016, I electronically filed the foregoing document with the Clerk of the Court using the CM/ECF System, and also served a copy of such filing on the following via U.S. Mail, postage prepaid: Plaintiff Pro Se Clarence Andrews, Jr. 1819 Bedford Street Petersburg, Virginia 23803 (804) 862-1374 s/ Jon S. Hubbard Jon S. Hubbard (VSB No. 71089) Sarah Warren Smith (VSB No. 81867) TROUTMAN SANDERS LLP 1001 Haxall Point Richmond, Virginia 23219 Telephone: (804) 697-1407 Facsimile: (804) 697-1339 E-mail: jon.hubbard@troutmansanders.com sarahwarren.smith@troutmansanders.com Counsel for Ditech Financial, LLC and Ditech Mortgage Corp. Case 3:16-cv-00631-JAG Document 6-1 Filed 10/10/16 Page 8 of 10 PageID# 33 IN THE XJNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division - LISA B. HOBBS, Plaintiff, V. DITECH, Defendant. Civil Action No. 3:16v687 ORDER Having considered the plaintiff's MOTION TO PROCEED IN FORMA PAUPERIS AND FINANCIAL AFFIDAVIT (ECF No. 1), and it appearing that the plaintiff qualifies to proceed in forma pauperis, and it further appearing that the proffered Complaint herein (ECF No. 1-1) is a criminal complaint which may not be brought by an individual but must be prosecuted by the Office of the United States Attorney, it is hereby ORDERED that the MOTION TO PROCEED IN FORMA PAUPERIS AND FINANCIAL AFFIDAVIT (ECF No. 1) is denied and that the Complaint is dismissed for lack of subject matter jurisdiction. Any appeal from this decision must be taken by filing a written notice of appeal with the Clerk of the Court within thirty (30) days COURT Case 3:16-cv-00687-REP Document 2 Filed 09/16/16 Page 1 of 2 PageID# 23 EXHIBIT "A" Case 3:16-cv-0 631-JAG Document 6-1 il 10/ 0/ 9 f 10 PageID# 4 of the date of entry hereof. Failure to file a timely notice of appeal may result in the loss of any right to appeal. The Clerk is directed to send a copy of this Order to the plaintiff. It is so ORDERED. Richmond, Virginia Date: September 16, 2016 /s/ Robert E. Payne Senior United States District Judge ml. Case 3:16-cv-00687-REP Document 2 Filed 09/16/16 Page 2 of 2 PageID# 24 EXHIBIT "A" Case 3:16-cv-00631-JAG Document 6-1 il 10/ 0/ 10 of 10 PageID# 35 29373707 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA --------------------------------------------------------X CLARENCE ANDREWS, JR., Plaintiff, - against - DITECH FINANCIAL LLC, DITECH MORTGAGE CORP. Defendants. No. 3:16-CV-00631 ------------------------------------------------------X ORDER AND NOW, this _____ day of ______, 2016, upon consideration of Defendants, Ditech Financial LLC and Ditech Mortgage Corp.’s Motion to Dismiss, and for good cause shown, it is hereby ORDERED and DECREED that Defendant’s Motion to Dismiss is GRANTED and Plaintiff’s Complaint against Defendant is DISMISSED with PREJUDICE. SO ORDERED: ________________________________________ Hon. John A. Gibney, Jr Case 3:16-cv-00631-JAG Document 6-2 Filed 10/10/16 Page 1 of 1 PageID# 36