Massey v. Specialized Loan Servicing, LLC

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JAMES H. MASSEY; and TAMARA S. MASSEY PLAINTIFFS v. SPECIALIZED LOAN SERVICING, LLC et al. DEFENDANTS

Civil Action No. 1:23-CV-00020-GNS

United States District Court, W.D. Kentucky, Bowling Green Division

September 18, 2023

MEMORANDUM OPINION AND ORDER

Greg N. Stivers, United States District Court Chief Judge

This matter is before the Court on Plaintiffs' Motion to Recuse (DN 11), Defendants' Motion to Dismiss (DN 13) Plaintiffs' Motion to Remand (DN 22), and Defendants' Motion to Stay (DN 26).^[1] The motions are ripe for adjudication. For the reasons below, Plaintiffs' Motion to Recuse (DN 11) and Plaintiffs' Motion to Remand (DN 22) are DENIED. Defendants' Motion to Dismiss (DN 13) is GRANTED. Defendants' Motion to Stay is DENIED AS MOOT.

I. STATEMENT OF FACTS AND CLAIMS

Plaintiffs James and Tamara Massey (“James” or “Tamara” separately, or “Plaintiffs” jointly) are the owners of real property located in Warren County, Kentucky. (Compl. ¶ 1, DN 1). In 2007 Plaintiffs took out a home equity line of credit secured by a mortgage on their Warren County property. (Compl. ¶ 2). After multiple assignments and transfers, Defendant Specialized Loan Servicing, LLC (“SLS”) became the holder of the lien. (Compl. ¶ 4). On August 23, 2019, Plaintiffs received a payoff statement from SLS indicating the total amount required to pay off the balance on the line of credit was $25,849.76. (Compl. ¶¶ 7-8). On August 27, 2019, Plaintiffs purchased a cashier's check in the amount of $25,849.76 made payable to SLS and sent the check through certified mail to an address designated by SLS. (Compl. ¶¶ 10-12). On August 30, 2019, SLS “received, accepted, and took possession of the check.” (Compl. ¶ 14).

On May 12, 2020, James, individually, filed a complaint in this Court against SLS alleging diversity jurisdiction and asserting claims for theft, fraud, extortion, outrage, and punitive damages. Compl. at 4, Massey v. Specialized Loan Servicing, LLC, No. 1:20-CV-00088-GNS (W.D. Ky. May 12, 2020) (DN 1). In that prior complaint, James alleged facts nearly identical to the facts alleged in the instant Complaint. James alleged that he had a home equity line of credit account held by SLS which he attempted to pay off by check in the amount of $25,849.76 which SLS received on August 30, 2019. Id. at 5. The prior complaint also alleged that SLS then informed James that it was unable to locate the check. Id. at 7. On May 16, 2020, James filed voluntary disclosures stating his bank had refunded him the amount of the cashier's check. Pl.'s Voluntary Discl. ¶¶ 8-9 Massey v. Specialized Loan Servicing, LLC, No. 1:20-CV-00088-GNS (W.D. Ky. July 2, 2020) (DN 16). On January 29, 2021, this Court dismissed the complaint with prejudice. Massey v. Specialized Loan Servicing, LLC, No. 1:20-CV-00088-GNS, 2021 WL 311868 (W.D. Ky. Jan. 29, 2021) (DN 25). James did not appeal this Court's decision.

On May 4, 2022, SLS assigned its interest in the lien to MEB Loan Trust VI as trustee. (Compl. ¶ 27). On that same day, MEB Loan Trust VI assigned its interest in the lien to Wilmington Savings Fund Society, FSB, as owner trustee of CSMC 2021-JR2 Trust. (Compl. ¶ 32).

On February 9, 2023, Plaintiffs filed this Complaint alleging that Defendants violated KRS 382.365 and seeking damages and declaratory relief in Warren Circuit Court. (Compl. 8-10). On February 10, 2023, Defendants removed the action to this Court. (DN 5).

II. DISCUSSION

A. Plaintiffs' Motion to Recuse

Plaintiffs move for recusal under 28 U.S.C. §§ 144 and 455. Plaintiffs assert that the undersigned District Judge is biased against Plaintiffs and in favor of Defendants as demonstrated in the reasoning of the Court's dismissal of Plaintiffs' prior action, Massey, 2021 WL 311868 (“Massey I”). Plaintiffs speculate that this asserted bias may be the result of their status as an interracial couple. (Pls.' Mot. Recusal 4 DN 11). Filed alongside Plaintiffs' motion is a brief affidavit in support of the motion as well as three articles related to a supposed societal bias against interracial couples and articles related to the merits of Plaintiffs' claims. (Massey Aff. ¶¶ 2-3, DN 11-1; Pls.' Mot. Recusal Ex. 1, DN 11-4; Pls.' Mot. Recusal Ex. A, DN 11-5; Pls.' Mot. Recusal Ex. B, DN 11-5).

1. 28 U.S.C. § 144

28 U.S.C. § 144 provides:

Whenever a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party, such judge shall proceed no further therein ....

The affidavit shall state the facts and the reasons for the belief that bias or prejudice exists, and shall be filed not less than ten days before the beginning of the term at which the proceeding is to be heard, or good cause shall be shown for failure to file it within such time. A party may file only one such affidavit in any case. It shall be accompanied by a certificate of counsel of record stating that it is made in good faith.

The Sixth Circuit has noted that “[t]he requirements of § 144 are strictly construed to prevent abuse because the statute is heavily weighted in favor of recusal.” Scott v. Metro. Health Corp., 234 Fed.Appx. 341, 353 (6th Cir. 2007) (citation omitted). The statute requires submission of both a factual affidavit and a certificate of good faith. 28 U.S.C § 144. Failure to submit the required certificate of good faith, even by a pro se litigant, is fatal to the motion. United States v. Steele, No. 3:16-cv-00095-GFVT-EBA, 2019 WL 191633, at *1 (E.D. Ky. Jan. 11, 2019) (citing Scott, 234 Fed.Appx. at 352-53). “[The affidavit] must state factual averments with particularity as to time, person, place, and circumstance.” Scott, 234 Fed.Appx. at 352 (citation omitted). “[A] district court is required to accept as true the factual allegations of the movant's affidavit, but the court may only credit facts that are sufficiently definite and particular to convince a reasonable person that bias exists; simple conclusions, opinions, or rumors are insufficient.” Id. (internal quotation marks omitted) (quoting Hoffman v. Caterpillar, Inc., 368 F.3d 709, 718 (7th Cir. 2001); Ullmo ex rel. Ullmo v. Gilmour Acad., 273 F.3d 671, 681 (6th Cir. 2007) (“To warrant recusal under § 144, an affidavit must ‘allege[] facts which a reasonable person would believe would indicate a judge has a personal bias against the moving party.'” (quoting Gen. Aviation, Inc. v. Cessna Aircraft, Co., 915 F.2d 1038, 1043 (6th Cir. 1990))). “The alleged facts . . . must relate to ‘extrajudicial conduct rather than . . . judicial conduct.'” Ullmo, 273 F.3d at 681 (quoting United States v. Story, 716 F.2d 1088, 1091 (6th Cir. 1983)). “In other words, the affidavit must allege facts showing ‘a personal bias as distinguished from a judicial one, arising out of the judge's background and association and not from the judge's view of the law.'” Id. (quoting Story, 716 F.2d at 1090).

In this instance, it is unnecessary to reach the merits of the motion because Plaintiffs have failed to comply with the procedural requirements of the statute by not submitting a certificate of good faith as required by Section 144. Therefore, to the extent Plaintiffs' motion to recuse is premised on Section 144, the motion is not properly before the Court. E.g., Scott, 234 Fed.Appx. at 352-53 (“Scott does not contest Metro's statement that she failed to file the certificate of counsel required by that section. Accordingly, Scott never placed a § 144 recusal motion properly before the district court.”).

Even overlooking Plaintiffs' failure to submit a certificate of good faith, Plaintiffs' factual affidavit is insufficient to establish a basis for relief under this statute. Plaintiffs' affidavit contains four paragraphs, only one of which attempts to justify Plaintiffs' motion. (Massey Aff. 1). The third paragraph states: “The reasons why I believe I am entitled to the relief I seek are set forth with specificity and particularity in the context of the Motion for Recusal filed concurrently with this Affidavit.” (Massey Aff. ¶ 3). Plaintiffs' unsworn statements within their motion are inadequate to satisfy the requirement of Section 144. Cf. Directv, Inc. v. Corona, No. 5:04-CV-132, 2005 WL 1654026, at *2 (W.D. Mich. July 12, 2005) (“[I]t is well established in the Sixth Circuit that an unsworn affidavit cannot be used to support or oppose a motion for summary judgment.” (citing Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962, 968-69 (6th Cir. 1991))). James' lone statement in the motion that he believes recusal is warranted is a far cry from “definite and particular” facts which would “convince a reasonable person that bias exists ....” Scott, 234 Fed.Appx. at 352. Plaintiffs' affidavit is therefore insufficient to support a motion for relief under Section 144.

2. 28 U.S.C. § 455

28 U.S.C. § 455(a) requires that “[a]ny justice judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” The substantive analysis under Section 455 is essentially the same as that under Section 144, which is whether a reasonable person would question the judge's impartiality. Compare Ullmo, 273 F.3d at 681 (“To warrant recusal under § 144, an affidavit must allege[] facts which a reasonable person would believe would indicate a judge has personal bias against the moving party), with Scott, 234 Fed.Appx. at 354 (“[T]he ultimate question is whether ‘a reasonable, objective person, knowing all of the circumstances, would have questioned the judge's impartiality.'” (quoting United States v. Hartsel, 199 F.3d 812, 820 (6th Cir. 1999))). As with Section 144,...