Dragash v. Fed. Nat'l Mortg. Ass'n, JP Morgan Chase Bank N.A.

DANIEL D. DRAGASH, Plaintiff-Appellant, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION,JP MORGAN CHASE BANK N.A., Defendants-Appellees.

No. 16-12123

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

July 5, 2017

[DO NOT PUBLISH]

Non-Argument Calendar

D.C. Docket No. 8:15-cv-00847-TGW

Appeal from the United States District Court for the Middle District of Florida

Before ROSENBAUM, JULIE CARNES, and JILL PRYOR, Circuit Judges.

PER CURIAM:

Daniel D. Dragash, proceeding pro se, filed this civil suit against Federal National Mortgage Association ("Fannie Mae") and JP Morgan Chase Bank, N.A. ("Chase"), seeking to void the mortgage and promissory note he executed in connection with the purchase of his home. The district court dismissed Dragash's suit with prejudice for failure to state a viable claim for relief. In this appeal, Dragash challenges the (1) denial of his motion to remand the case to state court, (2) the dismissal of his suit and the denial of leave to amend, and (3) the stay of discovery and other matters pending a ruling on the defendants' motion to dismiss. After careful review, we affirm.

I.

In December 2002, Dragash and his wife executed a mortgage and a promissory note in the amount of $229,000 in favor of Chase Manhattan Mortgage Corporation ("Chase Manhattan"). Later that month, on December 31, Chase Manhattan assigned its interest in the mortgage to Fannie Mae. Three days after the assignment, Chase Manhattan recorded the mortgage in the Official Records of Sarasota County. The assignment does not appear to have been recorded. The copy of the note which Dragash filed in the district court bore a blank endorsement signed by an Assistant Secretary at Chase Manhattan.

In December 2014, Dragash brought this action in Florida state court against Fannie Mae and Chase. No foreclosure action was pending at that time.¹ Dragash's allegations reflect that Chase is the current servicer of the loan while Fannie Mae holds the mortgage. The defendants removed the action to federal district court on the basis of diversity jurisdiction. Despite Dragash's attempts to have the case returned to state court, the district court found that it had subject-matter jurisdiction and denied his motion to remand. Later, the parties expressly consented to have a magistrate judge exercise jurisdiction over the case and enter final judgment. See 28 U.S.C. § 636(c).

Dragash filed the operative second amended complaint in October 2015, after the district court twice granted him leave to amend. Raising various legal theories, Dragash alleged that Chase Manhattan improperly recorded a mortgage it did not own, that the Assistant Secretary who endorsed the note was not authorized to sign it, that the note was non-negotiable and therefore void, that the note was improperly securitized, that Chase violated its obligations regarding "force-placed" insurance, that Chase fraudulently claimed to have possession of the original note but would not let him inspect it, that Fannie Mae had been unwilling to produce the mortgage, and that, in a "financial reconciliation" statement Chase sent him, Chase claimed to have made payments that he in fact made. Dragash asked the court torule the note "void and non-negotiable" and the mortgage without force or effect, and to order the return of all payments he had made to the defendants.

The defendants moved to dismiss the second amended complaint with prejudice for failure to state a claim. The magistrate judge stayed discovery and postponed mediation pending a ruling on the motion to dismiss.

Ultimately, the magistrate judge granted the defendants' motion to dismiss. In a comprehensive order, the magistrate judge reviewed each of Dragash's claims and their supporting allegations and concluded that Dragash had failed to plead a plausible claim for relief. The magistrate judge also found that granting Dragash leave to file a fourth complaint would be futile, noting that Dragash had tried to file a viable complaint three times, that he had been warned that additional amendments would be disfavored, and that his allegations did not show that there was any viable claim he could allege. Therefore, the magistrate judge dismissed Dragash's second amended complaint with prejudice.

Dragash moved the court to reconsider its ruling under both Rule 59(e) and Rule 60(b)(1) of the Federal Rules of Civil Procedure. The magistrate judge denied Dragash's motions, finding no basis to reconsider the ruling or to reopen the case. Dragash now appeals.

II.

Dragash first argues that the district court erred in denying his motion to remand and violated his due process rights as a result. We review de novo the denial of a motion to remand to state court. Henderson v. Washington Nat'l Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006). A defendant may remove a case from state court to federal court when the federal court has original jurisdiction over the case. See 28 U.S.C. § 1441(a). One basis for removal is diversity jurisdiction, which exists if the action is between citizens of different states and the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a)(1).

Here, the district court did not err in denying Dragash's motion to remand. The district court properly found that it had diversity jurisdiction, which Dragash does not contest. And the court properly rejected Dragash's arguments for remand.

First, Dragash's case does not present "exceptional circumstances" that would warrant abstention on grounds of comity. See Cty. of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-90 (1959). Second, even assuming that the notice of removal was not timely filed, the untimeliness of removal is merely a procedural defect which, because the court had diversity jurisdiction at the time the judgment was entered, "is an insufficient basis to vacate the judgment." Moore v. N. Am. Sports, Inc., 623 F.3d 1325, 1329-30 (11th Cir. 2010). Third, the Securities Act did not prevent removal in this case because Dragash's state-courtaction did not allege any violations of the Securities Act that would trigger 15 U.S.C. § 77v's prohibition on removal. Finally, the fact that there is little federal law on foreclosure matters is irrelevant because a district court sitting in diversity applies state substantive law. See Royalty Network, Inc. v. Harris, 756 F.3d 1351, 1357 (11th Cir. 2014) ("It is well established that when a federal court considers a case that arises under its diversity jurisdiction, the court is to apply state substantive law and federal procedural law.").

For these reasons, we affirm the denial of Dragash's motion to remand.

III.

Dragash next challenges the dismissal of his second amended complaint and asserts that he should have been given leave to amend his complaint again. He maintains that the defendants do not have the legal authority to enforce the underlying obligation reflected in the promissory note. He also contends that the court improperly applied the heightened pleading requirements of Rule 9(b), Fed. R. Civ. P., to some of his claims, and ignored some of his legal citations and his requests for judicial notice.²

We review de novo the grant of a motion to dismiss for failure to state a claim under Rule 12(b)(6), Fed. R. Civ. P., accepting as true the allegations in the complaint and construing them in the light most favorable to the plaintiff. Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1288 (11th Cir. 2010). Likewise, we review de novo the denial of leave to amend based on futility, which is a legal conclusion. Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1236 (11th Cir. 2008).

To survive a Rule 12(b)(6) motion to dismiss, a complaint must allege sufficient facts to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The "facts" for purposes of this inquiry do not include legal conclusions or naked assertions devoid of further factual enhancement. Id. "A claim is facially plausible when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Factual allegations that do not permit the court to infer more than the mere possibility of misconduct are insufficient. Am. Dental Ass'n, 605 F.3d at 1290. When a plaintiff alleges fraud or mistake, he or she must also meet the "heightened pleading standard" of Rule 9(b), Fed. R. Civ. P., which requires greater specificity. See id. at 1291 (listing the requirements).

Although we liberally construe the filings of pro se parties, we may not act as "de facto counsel." Campbell v. Air Jam. Ltd., 760 F.3d 1165, 1168-69 (11th Cir. 2014). Moreover, issues not briefed on appeal, even by pro se litigants, areconsidered abandoned. Timson v. Sampson, 518 F.3d 870, 874 (11th Cir. 2008). An appellant "abandons a claim when he either makes only passing references to it or raises it in a perfunctory manner without supporting arguments and authority." Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir.2014). We also do not address arguments raised for the first time in a pro se litigant's reply brief. Timson, 518 F.3d at 874.

Initially, we find that Dragash's opening brief on appeal fails to address the substance of the district court's ruling on the merits of his claims. He repeats some of the allegations from his second amended complaint, cites in conclusory fashion to documents he filed in the district court, asserts that the note is void because it was endorsed in blank and later transferred to a REMIC trust, and claims that at least one of his eight counts must have been viable. But beyond these broad and conclusory assertions, he has provided no argument or authority in support of his contention that the magistrate judge erred in dismissing his second amendment complaint. Accordingly, we conclude that Dragash has waived review of the substance of the magistrate judge's decision on appeal. See Sapuppo, 739 F.3d at 681. To the...