Hamilton v. JPMorgan Chase Bank, Nat'l Ass'n

118 F.Supp.3d 328

James Gary Hamilton, Plaintiff,

v.JPMorgan Chase Bank, National Association, et al., Defendants.

Case No. 1:15–cv–00149 (CRC)

United States District Court, District of Columbia.

Signed August 4, 2015

James Gary Hamilton, Rancho Santa Fe, CA, pro se.

Michael Bertrand Roberts, Reed Smith LLP, Elizabeth P. Papez, Winston & Strawn LLP, Washington, DC, Alejandro E. Moreno, J. Barrett Marum, Matthew L. Riemer, Sheppard Mullin Richter & Hampton LLP, San Diego, CA, for Defendant.

MEMORANDUM OPINION

CHRISTOPHER R. COOPER, United States District Judge

James Gary Hamilton, who is proceeding pro se, lost his California home to foreclosure after he fell behind on his mortgage. In this case, the third federal lawsuit he has filed over the foreclosure, Hamilton has sued four financial institutions with connections to the mortgage. He seeks cancellation of the foreclosure due to a variety of alleged deficiencies in the sale of the mortgage; accuses one of the Defendants, U.S. Bank, of violating the Truth in Lending Act ("TILA") by failing to notify him of the assignment of the mortgage; brings claims under the False Claims Act as a relator on behalf of the United States; and seeks to enforce a 2012 consent decree between the federal government and numerous banks, including two of the Defendants here, prohibiting a variety of deceptive mortgage-servicing practices. The Defendants have moved to dismiss Hamilton's complaint. For the reasons explained below, the Court will grant their motions.

I. Background

In 1999, Hamilton purchased a home in Rancho Santa Fe, California, with the help of a $700,000 loan from Downey Savings & Loan Association, F.A., which was secured by a deed of trust on the property. Compl. ¶¶ 2, 54. Hamilton alleges that the deed of trust was securitized and sold to a real estate mortgage investment conduit, with Wells Fargo as the Securities Administrator. Id. ¶ 2. The entire loan was later acquired by U.S. Bank when it purchased Downey's assets in receivership. Id. ¶ 2. In 2010, after Hamilton defaulted on the mortgage, his home was foreclosed and sold to HomeSales, Inc, a wholly owned subsidiary of JPMorgan. Id. ¶¶ 1, 68.

Hamilton brought suit in the U.S. District Court for the Southern District of California against U.S. Bank and HomeSales, Inc., as well as a variety of other institutions and individuals, alleging violation of his constitutional rights under 42 U.S.C. § 1983, violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, and state law claims for quiet title, wrongful foreclosure, slander of title, and fraudulent inducement. Hamilton v. U.S. Bank, N.A., Case No. 3:11–cv–00977, 2011 WL 5976244 (S.D.Cal. Nov. 28, 2011). The district court dismissed Hamilton's federal claims with prejudice and declined to exercise supplemental jurisdiction over his state law claims. Id.

Hamilton now brings an eight-count Complaint in this Court against JPMorgan Chase Bank, U.S. Bank, HomeSales Inc., and Wells Fargo Bank. Count One seeks cancellation of the 2010 foreclosure, alleges that Defendants lacked standing to foreclose on the property, and claims that the foreclosure constituted intentional infliction of emotional distress. In Counts Two through Five, Hamilton seeks to bring claims under the False Claims Act, 31 U.S.C. § 3729, as a relator on behalf of the United States and on behalf of a class of mortgagors. Count Six seeks to enforce a Consent Judgment entered into between several banks, including JP Morgan and Wells Fargo, and the federal government in a prior case in this district. See Consent Judgment, ECF Nos. 10 and 14, United States v. Bank of America Corp., 12–361 (D.D.C. Apr. 4, 2012) ("Consent Judgment"). Count Seven alleges that U.S. Bank violated the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, by not providing Hamilton with notice of the assignment of his mortgage. Compl. ¶ 122. Finally, Count Eight seeks cancellation of various, unspecified recorded documents associated with the non-judicial foreclosure of the property.

Defendants have moved to dismiss all of the claims, contending that: (1) Hamilton lacks standing to enforce the Consent Judgment because he was not a party to the underlying action that produced it; (2) an injunction and cancellation of documents are not causes of action, but rather remedies, and Hamilton cannot obtain title to the California property because he has failed to allege a viable, credible, and complete tender of the amounts he borrowed, as required under California law, see Aguilar v. Bocci, 39 Cal.App.3d 475, 477, 114 Cal.Rptr. 91 (1974) (establishing that under California law, a plaintiff may not quiet title without first discharging his debt); (3) Hamilton cannot bring a False Claims Act claim as a pro se plaintiff; and (4) Hamilton's TILA claim is barred by a one-year statute of limitations. Additionally, U.S. Bank moves to transfer venue to the Southern District of California, where the property is located and all the pertinent events allegedly took place.

II. Standard of Review

Under Federal Rule of Civil Procedure 12(b)(3), a defendant may move to dismiss a suit for improper venue. " ‘In considering a Rule 12(b)(3) motion, the court accepts the plaintiff's well-pled factual allegations regarding venue as true, draws all reasonable inferences from those allegations in the plaintiff's favor, and resolves any factual conflicts in the plaintiff's favor.’ " Hunter v. Johanns, 517 F.Supp.2d 340, 343 (D.D.C.2007) (quoting Darby v. Dep't of Energy, 231 F.Supp.2d 274, 276 (D.D.C.2002) ). The factual allegations offered by a plaintiff proceeding pro se are held "to less stringent standards than formal pleadings drafted by lawyers."

Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 n. 2 (D.C.Cir.2000) (quotations omitted).

Under Federal Rule of Civil Procedure 12(b)(6), a court must dismiss a complaint that fails to state a legally valid claim. The complaint must contain facts "stat[ing] a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

III. Analysis

A. Consent Judgment (Count 6)

In 2012, the federal government, 49 states, and the District of Columbia brought suit against numerous financial institutions, including JP Morgan and Wells Fargo, alleging that they had engaged in deceptive and illegal practices in servicing mortgages and foreclosing on houses before and during the 2008 financial crisis. The United States settled its claims against the banks with a Consent Judgment, which sets forth, among other things, a list of servicing standards for future foreclosure proceedings. Consent Judgment Ex. A, Settlement Term Sheet. Hamilton seeks to enforce these standards against the Defendants here. However, " ‘[a] consent decree is not enforceable directly or in collateral proceedings by those who are not parties to it even though they were intended to be benefited by it.’ " SEC v. Prudential Sec. Inc., 136 F.3d 153, 157 (D.C.Cir.1998) (quoting Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 750, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975) ). This rule applies with even greater force when the government is a party to the judgment. See Beckett v. Air Line Pilots Ass'n, 995 F.2d 280, 288 (D.C.Cir.1993) ("Only the Government can seek enforcement of its consent decrees ... [and] even if the Government intended its consent decree to benefit a third party, that party could not enforce it unless the decree so provided." (citations omitted)). Applying these principles, this and several other courts in this district have denied mortgagors' attempts to enforce the Consent Judgment. See, e.g., Walsh v. Bank of America, 113 F.Supp.3d 108, 2015 WL 3961160 (D.D.C.2015) ; McCain v. Bank of Am., 13 F.Supp.3d 45 (D.D.C.2014), aff'd sub nom., No. 14–7016, 2015 WL 3372356 (D.C.Cir. May 18, 2015) ; Seg elstrom v. Citibank, N.A., 76 F.Supp.3d 1, 2014 WL 6603202 (D.D.C.2014) ; Ananiev v. Freitas, 37 F.Supp.3d 297 (D.D.C.2014) ; Ghaffari v. Wells Fargo Bank, N.A., 6 F.Supp.3d 24 (D.D.C.2013). Accordingly, Hamilton cannot bring a claim under the Consent Judgment because he was not a party to it and the judgment does not explicitly permit third parties to enforce it.

Hamilton nevertheless contends that he can enforce the Consent Judgment as a relator on behalf of the government. Not so. A party may not proceed as a relator unless represented by counsel. E.g., U.S. ex rel. Fisher v. Network Software Assocs., 377 F.Supp.2d 195, 196 (D.D.C.2005) (citing Rockefeller v. Westinghouse Elec. Co., 274 F.Supp.2d 10, 12 (D.D.C.2003) ). Hamilton is proceeding pro se . Hamilton also maintains that a 177–year–old Supreme Court case, Mayor of Georgetown v. Alexandria Canal Co., 37 U.S. 12 Pet. 91, 9 L.Ed. 1012 (1838), permits the Court to exercise its equitable jurisdiction to enforce a consent decree to prevent irreparable harm. He relies on a passage from that case stating that "in cases of public nuisance, ... [equity jurisdiction] may be exercised in those cases in which there is imminent danger of irreparable mischief, before the tardiness of the law could reach it." Id. at 92 (emphasis added). A claim of nuisance, however, involves an "unreasonable interference" with either "public rights," such as health and safety, or the "private use of land." Restatement (Second) of Torts §§ 821B(1), 821D (1979). Nuisance-like activity might include, for example, "indecent conduct or a rubbish heap or the smoking chimney of a factory." Id. § 821A Comment b.1. The doctrine has no application to this case. Hamilton may not sue to enforce the Consent Judgment on his own behalf or as a private attorney general. Accordingly, Count Six will be...