Bush v. Reliant Bancorp, Inc.

DR. BYRON v. BUSH and KELLY DIANE BUSH, Plaintiffs, v. RELIANT BANCORP, INC., et al., Defendants.

Civil Action No. 3:21-cv-00525

United States District Court, M.D. Tennessee, Nashville Division

May 10, 2022

JEFFERY S. FRENSLEY, UNITED STATES MAGISTRATE JUDGE

REPORT AND RECOMMENDATION

RICHARDSON / FRENSLEY, JUDGE

I. INTRODUCTION AND BACKGROUND

This matter is before the Court upon two Motions to Dismiss Plaintiffs' Second Amended Complaint, both filed pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6): the first, filed by Defendants Reliant Bancorp, Inc., William Ronald DeBerry, Reliant Bank, Devan D. Ard, Jr., and Rick Belote (collectively “Reliant Defendants”) (Docket No. 27); and the second, filed by Defendants Court of Appeal Judges Frank Clement and Steven Stafford, and Chancellor James Martin III (collectively “Judicial Defendants”) (Docket No. 33).^[1]

Both Motions are accompanied by supporting Memoranda of Law. Docket Nos. 28, 34.

Plaintiffs have filed Responses to each Motion. Docket Nos. 30, 36.

A. Reliant Defendants' Motion to Dismiss

The Reliant Defendants have filed their Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)1 and 12(b)6, arguing that this action must be dismissed because:

(1) Plaintiffs ask this Court to overturn a final, non-appealable judgment of the Chancery Court for the 21^st Judicial District of Tennessee - an action that is barred by the Rooker-Feldman doctrine;

(2) Inasmuch as Plaintiffs now assert claims under 42 U.S.C. 1983, those claims are barred both by the statute of limitations and by Plaintiffs' failure to plausibly assert that any of the Reliant Defendants acted under of color of state law;

(3) Plaintiffs' claims are barred by res judicata because all of their issues were, or could have been, litigated in the numerous state-court proceedings that preceded this lawsuit.

Docket Nos. 27, 28.

The Reliant Defendants further argue that even if this action weren't barred by the doctrine of res judicata, the Rooker-Feldman doctrine, the expiration of the statute of limitations, and the failure to plausibly assert that any of the Reliant Defendants acted under color of state law, Plaintiffs' still would be unable to prevail because their factual allegations, even if true, fail to state a claim upon which relief can be granted against Reliant Bancorp, Inc. or Ronald DeBerry. Id. The Reliant Defendants note that this Court has given Plaintiffs' several opportunities to correct the numerous deficiencies in their Complaints, but despite these opportunities, Plaintiffs have been unable to do so. Id.

For these reasons, the Reliant Defendants argue that their Motion should be granted, and this action should be dismissed with prejudice. Id.

Plaintiffs argue in their Response that the “Reliant Defendants would suggest that Plaintiffs have had four fair and balanced attempts at justice in state courts, that Plaintiffs presented their case to an unbiased judiciary, but simply and fairly lost on each occasion, only to now have sour grapes; and desire to be reheard concerning the same matters.” Docket No. 30. Plaintiffs maintain that they “can and will prove at trial” such that they have shown a “basis for subject-matter jurisdiction.” Id. Plaintiffs also maintain that, as pro se litigants, they should be held to less stringent standards and they should be allowed to have their case heard by a jury of their peers who could “understand and smell fraud by an FDIC bank and fraud upon the court by corrupt judges, committed under “color of law” when they see it.” Id. (emphasis original).

Plaintiffs assert, “while [they] sought over a dozen actions in state court, not one hearing resulted in disclosure within opinions and rulings of the fraud committed by Reliants' [sic] Defendants . . . perhaps a future payoff to these judges not yet disclosed or revealed.” Id. Plaintiffs further contend that the Judicial Defendants acted under color of law as state officials when they committed “fraud upon the court” by “intentionally pretermitted and covered-up fraud committed by an FDIC bank against Plaintiffs; and in so doing, have denied Plaintiffs' due process afforded under § 1983, the U.S. Constitution and other federal laws, both civil and criminal.” Id.

With regard to the Reliant Defendants' statute of limitations and res judicata arguments, Plaintiffs respond that “contract disputes and debt collection claims have a six-year limit” and they assert that the statute has been “indefinitely” tolled because of the litigation and the “continued wrongful collection of fraud.” Id. Plaintiffs further allege that they “timely file[d] a counterclaim, dismissed for res judicata, only to be upheld for prior suit pending instead, by Tennessee's Appellate Court.” Id.

Plaintiffs additionally respond that the Reliant Defendants “cannot deny the repeated omission of material facts, without perjuring themselves, ” and are leaving the Judicial Defendants to “fend for themselves.” Id. Plaintiffs also assert that Fed.R.Civ.P. 60 provides a basis for relief. Id.

Finally, Plaintiffs acknowledge that the Reliant Defendants are correct that they cannot produce any evidence of payoffs, but they argue that this fact is true because Plaintiffs do not have the authority to criminally perform an investigation into the financial dealings between the Reliant Defendants and the Judicial Defendants, or to prosecute the same. Id. Plaintiffs ask this Court to “refer matters of suspected criminality to the Attorney General's office or other federal authorities for investigation.” Id.

For these reasons, Plaintiffs argue that the Reliant Defendants' Motion should be denied. Id.

B. Judicial Defendants' Motion to Dismiss

The Judicial Defendants have filed their Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)1 and 12(b)6, arguing that this action must be dismissed because:

(1) This action is barred by the Rooker-Feldman doctrine;

(2) The doctrine of absolute judicial immunity bars this claim against the Judicial Defendants in their individual capacities;

(3) The one-year statute of limitations bars this claim against Chancellor Martin and Judge Clement in its entirety, and bars many allegations against Judge Stafford;

(4) The Eleventh Amendment bars any claim for relief against Judge Clement, Judge Stafford and Chancellor Martin in their official capacities; and

(5) The Judicial Defendants are not “persons” for the purposes of 42 U.S.C. §1983. Docket Nos. 33, 34.

For these reasons, the Judicial Defendants argue that their Motion should be granted, and this action should be dismissed with prejudice. Id.

Plaintiffs' Response to the Judicial Defendants' Motion is a restatement of the arguments contained in their Response to the Reliant Defendants' Motion, recounted above. See Docket No. 30.

C. Background

1. First Lawsuit

This case arises out of a 2014 lawsuit brought by Defendant Reliant Bank against Plaintiffs to collect the deficiency, interest, and costs owed to it following a foreclosure of a deed of trust that secured a promissory note executed by Plaintiffs. Specifically, when Plaintiffs failed to repay their commercial real property loan when it matured, Plaintiffs requested and received two extensions of the maturity date, followed by a six-month forbearance. Plaintiffs filed a petition under Chapter 13 of the Bankruptcy Code to stop the foreclosure. After the bankruptcy case was dismissed, Reliant Bank foreclosed on the property. The foreclosure sales price did not fully satisfy the debt. Thereafter, Reliant filed suit to collect the deficiency.

Plaintiffs, who were represented by counsel during the trial, aver that the Hon. James G. Martin, III, of the 21^st Judicial District of Tennessee, erred when he ruled in favor of Reliant Bank. Judge Martin found that Reliant Bank did not sell the property for less than fair market value and that the signed promissory note gave full recourse to Reliant against Plaintiffs personally. After a four-day bench trial, Judge Martin granted Reliant Bank a judgment of $640, 783.41, plus postjudgment interest, as well as $106, 749.01 in attorney's fees and $3, 801.90 in discretionary costs.

Plaintiffs appealed to the Tennessee Court of Appeals, which heard Plaintiffs' claims, reviewed the record, and declined to grant Plaintiffs' requested relief. Commerce Union Bank, Brentwood, Tennessee v. Bush, ^[2] 512 S.W.3d 217, 226 (Tenn. Ct. App. 2016). Plaintiffs additionally applied for permission to appeal to the Tennessee Supreme Court, but their request was denied on November 16, 2016.

2. Second Lawsuit

In September 2015, while the prior case was on appeal to the Tennessee Court of Appeals, but before it had been decided, Plaintiffs filed a pro se complaint against Reliant Bank in the Chancery Court for the 21^st Judicial District of Tennessee alleging causes of action against Reliant Bank arising out of the same lending transaction. Reliant Bank moved to dismiss the complaint based upon the doctrine of prior suit pending. The trial court dismissed the action on several grounds.

Plaintiffs appealed to the Tennessee Court of Appeals, which affirmed the dismissal on the basis of the prior suit pending doctrine. Bush v. Commerce Union Bank, 523 S.W.3d 56, 61 (Tenn. Ct. App. 2017). Judge Stafford was on the appellate court panel but did not deliver the Opinion of the court.

Plaintiffs again applied for permission to appeal to the Tennessee Supreme Court, but their request was denied on May 18, 2017.

3. Third Lawsuit

On May 25, 2017, after the Tennessee Court of Appeals affirmed the trial court's dismissal, Plaintiffs filed a pro se Motion for Relief from the final judgment under Tenn. R. Civ. P 60.02. Plaintiffs' Motion raised the same allegations of fraud...