Keyes v. Nationstar Mortg., LLC

KRISTINE KEYES, Plaintiff, v. NATIONSTAR MORTGAGE,LLC; U.S. BANK, N.A. AS TRUSTEE FORLSF9 MASTER PARTICIPATION TRUST; MORTGAGE ELECTRONICREGISTRATION SYSTEMS INC.; BANK OF AMERICA, N.A. ASCLAIMED SUCCESSOR IN INTEREST TO COUNTRYWIDE HOME LOANS,INC.; SHERIFF OF CAMDEN COUNTY; AND RAS CITRON LAW OFFICES, Defendants.

No. 1:20-cv-02649 (NLH)(KMW)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

June 28, 2021

OPINION

APPEARANCES:

JOSHUA LOUIS THOMAS

JOSHUA L. THOMAS & ASSOCIATES

225 WILMINGTON WEST CHESTER PIKE

SUITE 200

CHADDS FORD, PA 19317

Attorney for Plaintiff Kristine Keyes.

FRANCESCA ANN ARCURE

MCCALLA RAYMER LEIBERT PIERCE, LLC

99 WOOD AVENUE

ISELIN, NJ 08830

Attorney for Defendant Nationstar Mortgage, LLC.

JOY HARMON SPERLING

STEPHEN ROBERT CATANZARO

DAY PITNEY LLP

1 JEFFERSON RD

PARSIPPANY, NJ 07054

Attorneys for Defendants U.S. Bank, N.A. As Trustee for LSF9 Master Participation Trust, and Mortgage Electronic Registration Systems Inc.

MICHAEL E. BLAINE

WINSTON & STRAWN, LLP

200 PARK AVENUE

NEW YORK, NY 10166

Attorney for Defendant Bank of America, N.A. As Claimed Successor in Interest to Countrywide Home Loans, Inc.

DAVID NEEREN

RAS CITRON, LLC

42 5 COMMERCE DRIVE

SUITE 150

FORT WASHINGTON, PA 19034

Attorney for Defendant RAS Citron Law Offices.

HILLMAN, District Judge

This matter comes back before the Court on Plaintiff's motion for reconsideration. Plaintiff is specifically seeking reconsideration of the Court's October 16, 2020 Opinion and Order dismissing her claims with prejudice, denying her motion to remand, and sanctioning her attorney, Joshua Thomas. All Defendants in this action have opposed her motion.

Defendants U.S. Bank, N.A. as Trustee for LSF9 Master Participation Trust and Mortgage Electronic Registration Systems Inc. ("MERS"), in their opposition brief, further request permission to supplement their original declaration of attorneys' fees and costs to be paid by Mr. Thomas as sanction, to add the additional fees and costs incurred in opposing the present motion. For the reasons expressed below, Plaintiff'smotion will be denied, Mr. Thomas will be further sanctioned for his actions in filing the present motion, and MERS and U.S. Bank will be permitted to supplement their declaration of fees and costs for this Court to consider in imposing its final sanction of Mr. Thomas.

BACKGROUND

The Court previously provided a detailed outline of the factual and procedural background of this case in its October 16, 2020 Opinion, (ECF No. 31), and assumes the parties' familiarity with the relevant history. Accordingly, it will only restate that background as necessary for the purposes of ruling on the presently pending motion and related sanctions request.

In August 2006, Plaintiff Kristine Keyes executed a mortgage on a property in Pennsauken Township, New Jersey in favor of Defendant MERS, which was later assigned to Defendant Nationstar Mortgage, LLC. (ECF No. 1-1, Ex. A and B). After she defaulted on the mortgage, Nationstar filed an action in mortgage foreclosure in December 2013. (ECF No. 9-6 Ex. D). A final judgment of foreclosure was entered by a state court on July 16, 2015. (ECF No. 1-1 at 7; ECF No. 9-8 Ex. F).

Over the next five years, Plaintiff filed a series of bankruptcy petitions in an apparent attempt to stall the foreclosure and sale of the property; her tactics eventuallyfailed after the bankruptcy court issued multiple orders vacating the automatic stays that accompany the filing of bankruptcy petitions and informed Plaintiff that no further automatic stays would be granted if she filed for bankruptcy a fourth time. (See ECF No. 31 at 3-5) (describing and providing citations for Plaintiff's history of filing bankruptcy petitions). Although the property was finally sold at a sheriff's sale in April 2019, Plaintiff continued to fight the process. Id. Around that time, she hired Joshua Thomas as counsel, and proceeded in November 2019 through February 2020 to file multiple motions to vacate the final judgment of foreclosure and the sheriff's sale, as well as to stay eviction, in the original foreclosure action in state chancery court. (ECF No. 13-5, Exs. J-P). Those motions were all eventually denied or withdrawn.

Plaintiff, represented by Mr. Thomas, then filed her complaint in this action in New Jersey Superior Court on February 18, 2020, which was removed by Nationstar on March 11 and assigned to this Court. Each of the named Defendants responded by filing four separate motions to dismiss; Plaintiff opposed the first two motions, failed to respond to or oppose the latter two which were filed at later dates, and further responded by filing a motion for remand back to the state Court. (See ECF No. 31 at 6) (describing filing history in thisaction). Two of the Defendants, MERS and U.S. Bank, then filed a motion for sanctions against Plaintiff and her attorney, alleging that they had knowingly brought frivolous claims. Plaintiff, through Mr. Thomas, eventually filed a brief opposing the motion for sanctions a week after the deadline to oppose that motion had passed.

This Court then issued an Opinion and Order on October 16, 2020, ruling on each of the then pending motions. First, the Court denied Plaintiff's motion to remand, finding that she had "not put forth any legitimate arguments for remand," and that her brief "entirely ignore[d], or misstate[d], the law regarding the removal of state court actions." (ECF No. 31 at 8-9). Second, the Court granted all four motions to dismiss, finding that Plaintiff's claims were clearly and unequivocally barred by the Rooker-Feldman doctrine and New Jersey's Entire Controversy Doctrine, and that Plaintiff had further failed to sufficiently state a claim under the Fair Debt Collections Practices Act. Id. at 20, 25, and 27.

Finally, the Court granted MERS and U.S. Bank's motion for Rule 11 sanctions against Mr. Thomas, and declined to impose sanctions against Plaintiff herself. The Court decided sanctioning Mr. Thomas was appropriate for a variety of reasons. First, the Court explained that each of the claims in the Complaint that Mr. Thomas had knowingly signed and filed were,"on their face, clearly and inarguably barred" in a manner that any reasonable, competent attorney would have realized if they had done the proper factual and legal research prior to filing. Id. at 29. This was thoroughly demonstrated by the fact that "[t]he single brief Mr. Thomas ha[d] filed in opposition to the motions to dismiss provide[d] no plausible arguments to defend against dismissal, citing only to inapplicable, inapposite, and irrelevant case law that [did] not rise to the level of presenting reasonable argument," and that the "motion to remand consist[ed] entirely of patently frivolous and unmeritorious arguments" that "flagrantly ignore[d] the straightforward law regarding removal of a state court action and fail[ed] to present any serious support for requesting remand and forcing the Defendants to brief the issue." Id. at 29-31.

The Opinion further emphasized that not only had Mr. Thomas put forward a series of consistently frivolous claims and arguments, but he had also failed to file any opposition to two motions to dismiss and had repeatedly missed other filing deadlines. In fact, Mr. Thomas managed to file his brief opposing the motion for sanctions, which directly targeted his own wallet, a week late. And, perhaps even more importantly, Mr. Thomas declined to even put forth the effort required to draft a wholly new brief, and instead "simply copied and pasted the frivolous arguments he made for remand and opposing themotions to dismiss into his brief opposing sanctions," with almost 7 full pages being entirely identical to his brief opposing the first two motions to dismiss. Id. at 31-33.

Finally, the Court stated that it had "serious misgivings about Mr. Thomas's motivations for filing this action in the first place," given the procedural history of these parties' dispute and Plaintiff's repeated prior attempts to avoid foreclosure and sale of the property. Id. at 33. As the Court explained in its prior Opinion, it appears clear that Mr. Thomas filed the present complaint in the only remaining court, the New Jersey Superior Court, which might possibly have entertained Plaintiff's claims or a complaint filed by Mr. Thomas: Plaintiff's exact claims here had already been rejected by a state chancery court only a few months earlier, Plaintiff had been told by the United States Bankruptcy Court for the District of New Jersey that she would receive no further automatic stays if she filed bankruptcy a fourth time, and Judge Kugler of this Court had previously entered an order enjoining Mr. Thomas from "filing any further complaint, lawsuit, or petition, which pertains to or references any prior foreclosure action, in the United States District Court for the District of New Jersey, without prior authorization of the Court." Id. at 33-34 (quoting Hood v. Victoria Crossing Townhouse Ass'n, et al., Civil Action No. 18-12259, at ECF No. 35). This action waspresumably one last attempt to stall or reverse the foreclosure-related legal proceedings which began almost seven years ago.

The Court therefore found that sanctions were appropriate and directed MERS and U.S. Bank to file a declaration outlining their attorneys' fees and costs incurred in defending this action. Id. at 35-36. However, recognizing "that Mr. Thomas runs a small firm and may not have the financial resources to reimburse MERS and U.S. Bank for the full fees and costs," the Court granted him permission to not only submit objections to specific amounts requested by Defendants, but also to submit an affidavit under seal addressing his ability to pay those fees and costs, which the Court stated it would consider in determining the proper sanctions amount to impose. Id. at 36.

Rather than comply with this Court's directions and take advantage of the opportunity to potentially limit the amount he would be ordered to pay as...