Opinion
5:23-CV-504-BO
03-27-2024
WILLIAM F. HARDWICK and ANGELA D. HARDWICK, Plaintiffs, v. MORGAN R. LEWIS, et al., Defendants.
ORDER AND MEMORANDUM AND RECOMMENDATION
Robert B. Jones, Jr. United States Magistrate Judge
This matter comes before the court on Plaintiffs' motion for relief from judgment, temporary restraining order, and preliminary injunction, [DE-5], motion for relief from judgment, [DE-30], and motion for extension of time and for a temporary restraining order, [DE-33]; Defendant Moore & Alphin's motion for an extension of time to respond to the complaint, [DE-20], and motion to dismiss, [DE-26]; Defendant Wells Fargo Bank, N.A.'s motion to dismiss, [DE-23]; and Defendants LOGS Legal Group, LLP, Morgan Lewis, and Jason K. Purser's motion to dismiss, [DE-31], No response has been filed to any motion, and the time to do so has expired. For the reasons that follow, Moore & Alphin's motion for extension of time is denied as moot, and it is recommended that Plaintiffs' motions be denied, Defendants' motions to dismiss be allowed, and the case be dismissed in its entirety, without prejudice, for failure to state a claim.
The motion is titled Motion for Enlargement of Time To Respond to Complaint, but in substance it seeks dismissal of the complaint pursuant to Fed.R.Civ.P. 9(b) and 12(b)(6).
I. Background
Plaintiffs initiated this action on September 12, 2023, by filing a form Complaint for Violation of Civil Rights against Morgan Lewis, attorney; Jason Purser, attorney; LOGS Legal Group, LLP; the General Court of Justice of North Carolina; Moore & Alphin, PLLC; Resmae Mortgage Corporation; Wells Fargo; and Nicole Birkley, Assistant Clerk of Superior Court. Compl. [DE-1] at 2-4. Plaintiffs assert claims pursuant to 42 U.S.C. § 1983 for violation of court due process, deprivation of rights (including the Fourth Amendment), deed fraud, violation of the Tucker Act (28 U.S.C. §§ 1346(a) and 1491), and predatory lending. Id. at 3. Plaintiffs assert the events giving rise to their claims occurred on October 4, 2006 and July 26, 2023 in the General Court of Justice of North Carolina and the Wake County Register of Deeds. Id. at 5. As for the facts underlying the claims, Plaintiffs simply listed the following: deprivation of the Administrative Procedure Act, victim of deed fraud, a subprime loan, court due process, and predatory lending and asserted that all defendants played a part. Id. Plaintiffs allege injuries including defamation, insomnia, credit defamation, public humiliation, marriage counseling, debt stress syndrome, loan default, upside down mortgage, and predatory lending, and seek $15 million in damages. Id. at 7.
Plaintiffs also filed, on September 14, 2023, a motion for relief from judgment, temporary restraining order, and preliminary injunction, seeking to stop the foreclosure sale of their home, which occurred on September 13, during the subsequent ten day upset bid period. [DE-5]. Plaintiffs asserted that, after seventeen years of financially struggling and contributing sweat equity into their home, they were requesting the maximum time for a short sale and “to restrain defendant from additional funds obligated to my family!” Id. at 1. On September 19, Plaintiffs filed a form Motion to Amend Order seeking to amend the Notice of Sale for their residence, but not specifying the specific amendment sought. [DE-6, -6-1].
In response to Plaintiffs' motions, Defendant Moore & Alphin sought an extension of time to respond to Plaintiffs' complaint, [DE-20], but then timely filed a motion to dismiss, [DE-26].Wells Fargo Bank, N.A. and LOGS Legal Group, LLP, Morgan Lewis, and Jason K. Purser (collectively the “LOGS Defendants”) also filed motions to dismiss. [DE-23, -31]. Finally, on November 3, Plaintiffs filed a motion for relief from judgment, attaching a Notice of Sale for their residence, [DE-30, -30-1], and a motion for extension of time for Defendants to respond and for a temporary restraining order against Defendants to “cease Sale of property until Case is resolved,” and attaching the Notice of Sale for their residence. [DE-33, -33-1].
The motion for extension of time is denied as moot.
II. Discussion
A. Motions for Injunctive and Other Relief
Plaintiffs filed three motions seeking a temporary restraining order or preliminary injunction and relief from a state court judgment to stop the foreclosure sale of their residence. [DE-5, -30, -33], A temporary restraining order (“TRO”) and preliminary injunction, which are in most all respects alike but for a TRO's limited duration, provide extraordinary relief “involving the exercise of very far-reaching power to be granted only sparingly and in limited circumstances” when necessary to protect the status quo and prevent irreparable harm while the lawsuit is pending. MicroStrategy, Inc. v. Motorola, Inc., 245 F.3d 335, 339 (4th Cir. 2001) (quoting Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d 802, 816 (4th Cir. 1991)); Di Biase v. SPX Corp., 872 F.3d 224, 230 (4th Cir. 2017); Mitchell v. N.C. Div. of Emp. Sec., 76 F.Supp.3d 620, 628 (E.D. N.C. 2014), aff'd, 599 Fed.Appx. 517 (4th Cir. 2015). To obtain preliminary injunctive relief in either form, the plaintiff must demonstrate “1) that he is likely to succeed on the merits; 2) that he is likely to suffer irreparable harm in the absence of preliminary relief; 3) that the balance of equities tips in his favor; and 4) that an injunction is in the public interest.” Shibumi Shade, Inc. v. Beach Shade LLC, No. 5:21-CV-256-FL, 2022 WL 390839, at *3 (E.D. N.C. Feb. 8, 2022) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)), appeal dismissed, No. 2023-1051, 2022 WL 17661183 (Fed. Cir. Dec. 14, 2022). Because each of the four factors must be satisfied, the court need not address all the factors where one or more is absent. See Henderson for Nat'l Lab. Reis. Bd. v. Bluefield Hosp. Co., LLC, 902 F.3d 432, 439 (4th Cir. 2018) (rejecting argument that the district court was required to consider all four Winter factors before denying preliminary injunctive relief).
None of Plaintiffs' motions provides any facts from which the court could find that they are likely to succeed on the merits. While Plaintiffs claim that they were victims of deed fraud and predatory lending and that their due process and other rights were violated, they do not allege any facts whatsoever to support those claims. See Webb v. Buffaloe, No. 5:22-CT-3192-FL, 2022 WL 17978791, at *1 (E.D. N.C. Dec. 28, 2022) (conclusory allegations are insufficient to establish a likelihood of success on the merits for obtaining a TRO or preliminary injunction). Accordingly, because Plaintiffs have not demonstrated they are likely to succeed on the merits, their motions for a temporary restraining order or preliminary injunction should be denied.
Likewise, as for Plaintiffs' request for relief from judgment, Plaintiffs have provided no facts from which the court could find that relief from any foreclosure judgment is warranted. Furthermore, the court lacks jurisdiction to provide such relief under the Rooker-Feldman doctrine, where Plaintiffs attempt to challenge the results of a state court foreclosure proceeding under 42 U.S.C. § 1983. See Dingle v. Khan, No. 5:19-CV-129-D, 2020 WL 2120010, at *6 (E.D. N.C. Feb. 20, 2020) (citing Jones v. Wells Fargo Bank, N.A., No. CV 6:17-2486-BHH, 2018 WL 4203672, at *2 (D.S.C. Sept. 4, 2018) (“It is abundantly clear both that Plaintiffs instant claims are ‘inextricably intertwined' with the state court foreclosure matters, and that the vast majority of specific issues he raises have already been ‘actually decided' in the state court cases.”); Carmichael v. Irwin Mortg. Corp., No. 5:14-CV-122-D, 2014 WL 7205099, at *3 (E.D. N.C. Dec. 17, 2014) (“This court, however, lacks subject-matter jurisdiction to sit in direct review of a North Carolina state foreclosure action.”); Ruiz v. Nationstar Mortg. LLC, No. 1:12-CV-272, 2013 WL 4519180, at *3 (M.D. N.C. Aug. 26, 2013) (“Plaintiffs remedy for these and the other alleged defects in the state foreclosure proceeding was to appeal through the state judicial system and then seek review in the Supreme Court of the United States. This Court lacks subject matter jurisdiction to review the state court's order.”), aff'd, 556 Fed.Appx. 271 (4th Cir. Feb. 25, 2014); Grantham v. Grayspencer, No. 5:11-CV-689-BO, 2012 WL 13019697 (E.D. N.C. June 12, 2012) (dismissing removed action and denying stay of state foreclosure proceedings pursuant to Rooker-Feldman doctrine)), adopted by, 2020 WL 1272266 (E.D. N.C. Mar. 16, 2020). Under the Rooker-Feldman doctrine, “lower federal courts are precluded from exercising appellate jurisdiction over final state-court judgments.” Lance v. Dennis, 546 U.S. 459, 463 (2006) (per curiam); see Rooker v. Fid. Tr. Co., 263 U.S. 413 (1923); D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983). Jurisdiction to review such decisions lies with superior state courts and, ultimately, the United States Supreme Court. See 28 U.S.C. § 1257(a). Accordingly, the court lacks jurisdiction to provide relief to Plaintiffs from any state court foreclosure judgment.
Finally, Plaintiffs' request for an extension of time for Defendants to respond to the motion, [DE-33], lacks merit where Defendants requested no such relief.
Accordingly, it is recommended that Plaintiffs' motions be denied.
B. Motions to Dismiss
Moore & Alphin, Wells Fargo Bank, N.A., and the LOGS Defendants each filed motions to dismiss pursuant to Fed.R.Civ.P. 9(b) and 12(b)(6) for failure to state a claim. [DE-23, -26, -31]. Plaintiffs did not respond to the motions.
A motion to dismiss under Rule 12(b)(6) tests the complaint's legal and factual sufficiency. See Ashcroft v. Iqbal, 556 U.S. 662, 677-80 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-63 (2007); Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 2010), aff'd, 566 U.S. 30 (2012); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). To withstand a Rule 12(b)(6) motion, a pleading “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quotation omitted); see Twombly, 550 U.S. at 570; Giarratano, 521 F.3d at 302. In considering the motion, the court must construe the facts and reasonable inferences “in the light most favorable to the [nonmoving party].” Massey v. Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014). A court need not accept as true a complaint's legal conclusions, “unwarranted inferences, unreasonable conclusions, or arguments.” Giarratano, 521 F.3d at 302; see Iqbal, 556 U.S. at 678-79. Rather, a plaintiffs allegations must “nudge[] [his] claims,” Twombly, 550 U.S. at 570, beyond the realm of “mere possibility” into “plausibility,” Iqbal, 556 U.S. at 678-79.
Pleadings drafted by a pro se litigant are held to a less stringent standard than those drafted by attorneys. See Haines v. Kerner, 404 U.S. 519, 520 (1972). The court is charged with liberally construing a pleading filed by a pro se litigant to allow for the development of a potentially meritorious claim. See id.; Estelle v. Gamble, 429 U.S. 97, 106 (1976); Noble v. Barnett, 24 F.3d 582, 587 n.6 (4th Cir. 1994). However, the principles requiring generous construction of pro se complaints are not without limits, and the district courts are not required “to conjure up questions never squarely presented to them.” Beaudett v. City of Hampton, ITS F.2d 1274, 1278 (4th Cir. 1985).
Plaintiffs assert claims pursuant to 42 U.S.C. § 1983 for violation of court due process, deprivation of rights (including the Fourth Amendment), deed fraud, violation of the Tucker Act (28 U.S.C. §§ 1346(a) and 1491), and predatory lending. Compl. [DE-1] at 3. Aside from alleging that the events giving rise to their claims occurred on October 4, 2006 and July 26, 2023 in the General Court of Justice of North Carolina and the Wake County Register of Deeds, id. at 5, Plaintiffs allege no facts whatsoever to support their claims. Id. The court is unable to ascertain from the complaint what wrongful acts Moore & Alphin, Wells Fargo Bank, N.A., and the LOGS Defendants are alleged to have committed. A complaint 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). This is necessary “in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests).]'” Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not contain detailed factual allegations, but the plaintiff must allege more than labels and conclusions. Id. Plaintiffs' complaint contains only labels and conclusions and fails to meet the basic pleading requirements of Fed.R.Civ.P. 8(a) and Iqbal and Twombly. Accordingly, Plaintiffs have failed to state a claim against these Defendants.
Plaintiffs have likewise failed to plead any facts with particularity as required to sufficiently plead a fraud claim.
Where a claim sounds in fraud, the claim is subject to the heightened pleading standards of Fed.R.Civ.P. 9(b). Rule 9(b) provides that “[i]n alleging fraud ... a party must state with particularity the circumstances constituting fraud . . . Fed.R.Civ.P. 9(b). This heightened pleading standard applies to permit the identification and disposition of unfounded and unmeritorious fraud claims at any early stage of litigation. Teacher's Ret. Sys. of La. v. Hunter, 477 F.3d 162, 171 (4th Cir. 2007) (citing 5A Charles A. Wright & Hunter M. Miller, Federal Practice and Procedure § 1296 (3d ed. 2004)).
To make out a claim of fraud under North Carolina law, a plaintiff must establish that the defendant “(1) made a false representation of material fact, (2) knew it was false (or made it with reckless disregard of its truth or falsity), and (3) intended that the plaintiff rely upon it. In addition, (4) the plaintiff must be injured by reasonably relying on the false representation.” Food Lion, Inc. v. Capital Cities/ABC, Inc., 194 F.3d 505, 512 (4th Cir. 1999) (identifying elements of fraud claim under North Carolina law); see also State v. Seelig, 738 S.E.2d 427, 431 (N.C. Ct. App. 2013) (identifying elements of offense of obtaining property by false pretenses as “(1) a false representation of a subsisting fact or a future fulfillment or event, (2) which is calculated and intended to deceive, (3) which does in fact deceive, and (4) by which one person obtains or attempts to obtain value from another” (internal quotation marks omitted)).Knott v. Nationstar Mortg, LLC, No. 5:15-CV-00043-RLV, 2016 WL 5329613, at *5 (W.D. N.C. Sept. 21, 2016). Here, Plaintiffs have not alleged any of the requisite elements of fraud against any defendant in this case. Accordingly, Plaintiffs have failed to state a fraud claim.
Aside from a total lack of factual support for their claims, because Moore & Alphin, Wells Fargo Bank, N.A., and the LOGS Defendants are private entities and not state actors, Plaintiffs cannot state a claim against them under 42 U.S.C. § 1983. Section 1983 provides protection against “deprivation of any rights, privileges, or immunities secured by the Constitution and laws ... by a person acting under color of state law.” Brown v. Phylbeck, No. 4:18-CV-202-FL, 2019 WL 2745758, at *3 (E.D. N.C. July 1, 2019) (citations omitted). Purely private conduct, “no matter how discriminatory or wrongful,” is not actionable under § 1983. Mentavlos v. Anderson, 249 F.3d 301, 310 (4th Cir. 2001). State action requires proof that the alleged constitutional deprivation was (1) “caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State” and (2) that “the party charged with the deprivation [is] a person who may fairly be said to be a state actor.” Lugar v. Edmondson Oil Co., 457 U.S. 922, 937 (1982). Moore & Alphin, Wells Fargo Bank, N.A., and the LOGS Defendants are private entities and there are no allegations that would support treating them as state actors. Accordingly, Plaintiffs cannot state a § 1983 claim against these Defendants.
As for Plaintiffs' invocation of the Tucker Act, it is inapplicable because there are no claims asserted against the United States. The Tucker Act provides that jurisdiction is proper in the Court of Federal Claims over “any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, ... or for liquidated or unliquidated damages in cases not sounding in tort.” 28U.S.C. § 1491. Under the so-called “Little Tucker Act,” a subsection of the Federal Tort Claims Act, the district courts and the Court of Federal Claims have concurrent jurisdiction over claims against the United States not exceeding $10,000. 28 U.S.C. § 1346(a)(2). “If a plaintiffs claim is for more than $10,000, he must bring the action in the Court of Federal Claims.” Randall, 95 F.3d at 347. The Tucker Act “is itself only a jurisdictional statute; it does not create any substantive right enforceable against the United States for money damages.” United States v. Testan, 424 U.S. 392, 398 (1976). Accordingly, the Tucker Act is inapplicable to this case where the United States is not a party. See Nolan v. Bright, No. CV DKC-22-196,2022 WL 717048, at *4 (D. Md. Mar. 10, 2022) (“Because the United States is not a party to this case, the Tucker Act does not apply.”).
In sum, Plaintiffs' complaint fails to state a claim against Moore & Alphin, Wells Fargo Bank, N.A., and the LOGS Defendants, pursuant to Fed.R.Civ.P. 9(b) and 12(b)(6), and it is recommended that the motions to dismiss be allowed.
C. Dismissal of Non-Moving Defendants
There are three remaining defendants in this case, the General Court of Justice of North Carolina, Resmae Mortgage Corporation, and Nicole Birkley (Assistant Clerk of Superior Court). While these defendants have not filed motions to dismiss, it is recommended that the court sua sponte dismiss them from this action.
The Fourth Circuit has recognized that “sua sponte dismissals of complaints under Rule 12(b)(6) are appropriate.” Robertson v. Anderson Mill Elementary Sch., 989 F.3d 282, 290-91 (4th Cir. 2021) (citing Chute v. Walker, 281 F.3d 314, 319 (1st Cir. 2002) (internal ellipsis omitted); Hager v. DBG Partners, Inc., 903 F.3d 460, 464 (5th Cir. 2018); Smithrud v. City of St. Paul, 746 F.3d 391, 395 (8th Cir. 2014); 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed. Oct. 2020 update) (“Even if a party does not make a formal motion under Rule 12(b)(6), the district court judge on his or her own initiative may note the inadequacy of the complaint and dismiss it for failure to state a claim . . . .”)). “[T]he party whose complaint stands to be dismissed must be ‘afforded notice and an opportunity to amend the complaint or otherwise respond.'” Id. (first quoting Chute, 281 F.3d at 319; then citing Hager, 903 F.3d at 464 (“[F]aimess in this context requires both notice of the court's intention and an opportunity to respond.” (alteration in original))).
Here, Plaintiffs' complaint fails to allege any facts to support their claims against the General Court of Justice of North Carolina, Resmae Mortgage Corporation, and Nicole Birkley. Therefore, Plaintiffs' complaint against these defendants fails to meet the basic pleading requirements of Fed.R.Civ.P. 8(a) and Iqbal and Twombly and should be dismissed. Furthermore, the General Court of Justice of North Carolina is entitled to sovereign immunity under the Eleventh Amendment. North Carolina's state constitution creates a “unified judicial system,” known as the General Court of Justice, which consists of an Appellate Division, a Superior Court Division, and a District Court Division. N.C. Const, art. IV, § 2. As such, it is part of the State of North Carolina and therefore immune from liability under the Eleventh Amendment. See Brown v. Superior Ct. of Wake Cnty., No. 4:18-CV-199-FL, 2019 WL 442161, at *2 (E.D. N.C. Jan. 17, 2019) (“[T]he Superior Court of Wake County and the State of North Carolina are protected by sovereign immunity under the Eleventh Amendment.”) (citing Dillon v. Mills, No. 4:16-CV-3-FL, 2016 WL 3102015, at *2 (E.D. N.C. June 2, 2016) (dismissing claims against the North Carolina Judicial System because state agencies are immune from suits by private citizens in federal court absent waiver of immunity by the state); Philips v. N.C. State, No. 5:15-CV-95-F, 2015 WL 9462095, at *6 (E.D. N.C. Dec. 28, 2015) (dismissing claims against state defendants, including the North Carolina Court System and the State of North Carolina, as barred by sovereign immunity)), adopted by, 2019 WL 441163 (E.D. N.C. Feb. 4, 2019). Accordingly, it is recommended that Plaintiffs' claims against the General Court of Justice of North Carolina, Resmae Mortgage Corporation, and Nicole Birkley also be dismissed.
III. Conclusion
For the reasons stated herein, Moore & Alphin's motion for extension of time is denied as moot, and it is recommended that Plaintiffs' motions be denied, Defendants' motions to dismiss be allowed, and the case be dismissed in its entirety, without prejudice, for failure to state a claim.
IT IS DIRECTED that a copy of this Memorandum and Recommendation be served on the parties. You shall have until April 10, 2024 to file written objections to the Memorandum and Recommendation. The presiding district judge must conduct his or her own review (that is, make a de novo determination) of those portions of the Memorandum and Recommendation to which objection is properly made and may accept, reject, or modify the determinations in the Memorandum and Recommendation; receive further evidence; or return the matter to the magistrate judge with instructions. See, e.g., 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3); Local Civ. R. 1.1 (permitting modification of deadlines specified in local rules), 72.4(b), E.D. N.C.
If a party does not file written objections to the Memorandum and Recommendation by the foregoing deadline, the party will be giving up the right to review of the Memorandum and Recommendation by the presiding district judge as described above, and the presiding district judge may enter an order or judgment based on the Memorandum and Recommendation without such review. In addition, the party's failure to file written objections by the foregoing deadline will bar the party from appealing to the Court of Appeals from an order or judgment of the presiding district judge based on the Memorandum and Recommendation. See Wright v. Collins, 766 F.2d 841, 846-47 (4th Cir. 1985).