Court: District Court, S.D. Florida; December 3, 2018; Federal District Court
Defendant JPMorgan Chase Bank, N.A. filed a Motion to Dismiss Plaintiffs Daniel and Pamela Robey's Amended Complaint, which the Court reviewed alongside the Plaintiffs' Response and Chase's Reply. The case originates from the Robeys' purchase of a residential lot in North Carolina in 2005, with the intention to build a home. To refinance their purchase, they sought a loan from Washington Mutual Bank in 2008, executing a promissory note and deed of trust. Notably, only Mr. Robey signed these documents, raising concerns about compliance with North Carolina law, which requires both spouses' signatures on such deeds.
After the loan's documentation, Mr. Robey made payments to Washington Mutual until he discovered that the FDIC had taken over Washington Mutual and sold its assets to Chase in September 2008. The Robeys did not receive formal notice of this transfer, but later received invoices from Chase for their loan payments, which matched their previous loan statements from Washington Mutual.
Subsequently, Mr. Robey received a misleading letter from "Washington Mutual" accusing him of failing to pay his 2008 real estate taxes. Although the Deed allowed for escrowing funds, the Robeys initially paid taxes and insurance directly, and Chase allegedly waived the escrow requirement. Mr. Robey provided Chase with proof of his tax payment, but despite his repeated attempts to communicate this, Chase failed to acknowledge the payment or respond.
On April 20, 2009, Chase, under the name "Washington Mutual," refused to accept several monthly loan payments from Mr. Robey, resulting in significant late fees added to his loan balance without explanation. This lack of communication made it increasingly difficult for Mr. Robey to manage his loan expenses. Chase also unilaterally escrowed funds, despite not having the authority to do so, which inaccurately inflated the loan balance and contributed to the appearance of loan default.
On September 7, 2010, the Robeys received a letter from Chase stating that their loan was in arrears, followed by a foreclosure notice on September 15, 2010. Despite receiving mixed messages about potential loan modification and workout options, Mr. Robey's responses went unanswered except for more correspondence from Chase. On January 26, 2011, Mr. Robey sent a Qualified Written Request (QWR) seeking a full accounting of his loan payments, but did not receive a response until after Chase initiated foreclosure proceedings on January 20, 2011, in Watauga County, North Carolina. It is alleged that the loan was never in default to justify these foreclosure actions. Chase's responses to the QWR included a statement that it was "investigating" and a refusal to release original loan documents, while failing to provide the requested accounting information.
Mr. Robey sought a loan modification to prevent losing his home and to address payment and escrow disputes. On February 9, 2011, Chase confirmed the initiation of a loan modification process. Despite Mr. Robey hiring at least two law firms for assistance and Chase's assurances of interest in modifying the loan, Chase never authorized the modification and sent unhelpful correspondence instead. Chase ignored several Qualified Written Requests (QWRs) and failed to provide requested information, ultimately indicating on March 9, 2011, that it was "working" on the requests but did not follow through. An untimely response on April 21, 2011, indicated $2,700 had been placed in a suspense account without explanation, which the plaintiffs deemed erroneous. Subsequent responses continued to lack the necessary information. On February 10, 2012, Chase wrongfully charged the Robeys for forced-placed insurance, which was canceled after they provided proof of existing insurance.
Chase's actions were characterized by the plaintiffs as intentional attempts to push the Robeys into foreclosure. In North Carolina, where non-judicial foreclosure is practiced, Chase employed a Substitute Trustee from a for-profit company associated with Chase's law firm, which is supposed to maintain impartiality. The Robeys hired a lawyer who discovered that the note had a blank endorsement and had not been assigned to Chase, questioning Chase's standing to enforce the note. Despite notifying relevant parties about contesting the foreclosure on these grounds, foreclosure proceedings continued. In a bid to save their home and address these issues, the Robeys filed for bankruptcy in the Southern District of Florida.
Chase and its attorneys allegedly misrepresented the status of a Loan during bankruptcy proceedings, falsely claiming it was in default. A purported Vice President of Chase filed a fraudulent proof of claim concerning the Loan. Despite the bankruptcy filing, the property was sold, and Mr. Robey discovered that the Deed contained a forged signature of Mrs. Robey. Expert analysis confirmed the forgery and identified the notary acknowledgment as fraudulent. The Robeys assert that Mrs. Robey never signed the Deed or the Note, and they suspect that someone intentionally forged her signature to validate the Deed under North Carolina law. Additional deficiencies in the Deed include incorrect property location, improper notarization, and lacking identification numbers. The plaintiffs maintain that the forged Deed is void ab initio, making the subsequent foreclosure sale invalid. Nevertheless, Chase and associated parties proceeded with the foreclosure despite the evidence of forgery and alleged lack of Loan default, resulting in the Robeys' eviction and the property's resale.
The plaintiffs initiated this action on March 19, 2018, against Chase, alleging multiple claims including wrongful foreclosure, fraud, violations of state and federal trade practices, malicious prosecution, civil RICO, conversion, negligence, gross negligence, breach of good faith, quiet title, RESPA violations, and FDCPA violations. Chase has filed a motion to dismiss the Complaint in its entirety with prejudice. Legal standards for a motion to dismiss require a complaint to contain a plausible claim for relief, with sufficient factual matter that allows the court to reasonably infer liability against the defendant.
A complaint must present facts that establish a plausible entitlement to relief, moving beyond mere consistency with a defendant's liability, as highlighted by the Supreme Court precedents Iqbal and Twombly. While detailed factual allegations are not mandatory, a mere formulaic recitation of a claim's elements is insufficient; the plaintiff must provide enough factual matter to elevate the claim above speculation. In evaluating a motion to dismiss, a district court is limited to the pleadings and any attached exhibits. If these exhibits contradict the plaintiff's general allegations, the exhibits take precedence, and if they negate the alleged cause of action, dismissal is warranted.
Chase has filed a motion to dismiss under multiple Federal Rules of Civil Procedure, arguing: (1) improper venue, asserting the case should be in Watauga County, North Carolina; (2) the lawsuit is barred by the Rooker-Feldman doctrine, as it constitutes a collateral attack on a state court foreclosure judgment; (3) claims are precluded by res judicata and collateral estoppel, given the prior adjudication of the North Carolina foreclosure case; (4) claims are also barred by the Noerr-Pennington doctrine and Florida's litigation privilege regarding wrongful litigation; and (5) each claim fails to state a valid cause of action under Rule 12(b)(6). The court agrees with Chase's venue argument and does not address the remaining issues, concluding that venue does not lie in the current district. Venue is governed by 28 U.S.C. § 1391, which outlines specific criteria for determining proper venue in civil actions. If a challenge to venue is upheld, the case must be dismissed or transferred according to 28 U.S.C. § 1406(a).
RESPA's venue provision stipulates that proper venue is in the district where the property is located or where the alleged violation occurred (12 U.S.C. 2614). If a defendant contests the venue, the plaintiff must demonstrate its appropriateness, as established in Delong Equipment Co. v. Washington Mills Abrasive Co. and Hemispherx Biopharma, Inc. v. MidSouth Capital, Inc. A court must accept the allegations in the complaint as true unless contradicted by the defendant's affidavits. The Southern District of Florida is deemed an improper venue since the property is in North Carolina. The alleged violations regarding the Loan acquisition, QWR, and escrow management did not occur in Florida. Relevant case law indicates that violations happen where the loan servicer acts, not where the plaintiff or their attorneys operate. Therefore, the venue for the RESPA claim should be in the Western District of North Carolina or the Middle District of Florida.
Regarding transactional venue, the plaintiffs argue that venue is appropriate because they reside in the Southern District of Florida and several events related to their claims occurred there. However, to meet the standard under 28 U.S.C. 1391(b)(2), a substantial part of the events or omissions must have occurred in the district. The court's analysis should focus on the defendant's relevant activities, not the plaintiff's. Only those activities that directly relate to the claim are pertinent, and the venue must reflect locations where substantial events occurred, as clarified in Jenkins Brick Co. v. Bremer and other cited cases.
Only actions that are wrongful or closely connected to a wrong can establish proper venue for a legal claim. In *Jenkins Brick*, the Eleventh Circuit ruled that venue for a breach-of-non-compete-agreement suit was improper in Alabama, despite the employer's business operations being primarily there, because the breach occurred in Georgia, which had the relevant nexus to the cause of action. Similarly, in *Forbes v. Lenox Financial Mortgage, LLC*, the court determined that although a significant number of mortgage closings occurred in Florida, the underlying causes of action related to contract formation and breach occurred in Georgia, making Florida's connection tenuous. In both cases, while venue-related activities were present, they did not constitute a "substantial part" of the claims.
In the current Complaint, it is noted that Chase's actions giving rise to the claims include several key acts: the Robeys purchased property in North Carolina; Mr. Robey executed a deed in Miami, which was not a Chase action; Chase took over the loan without notifying the Robeys, with no specified location for such notification; and there were various correspondences exchanged between the Robeys and Chase regarding loan matters, but the locations of these communications remain unspecified. The Complaint must clarify whether a "substantial part" of Chase's actions occurred in the Southern District of Florida.
Chase allegedly refused to accept loan payments from the Plaintiffs, but the Complaint lacks details on where those payments were to be sent. It is claimed that Chase improperly managed escrow funds and force-placed insurance charges, without specifying the locations of these actions. Additionally, the Complaint asserts that someone forged Mrs. Robey's signature on a deed, but does not indicate that this forgery occurred in the relevant District or that Chase was involved. The deed in question was notarized in Miami despite the Robeys never signing loan documents there, and again, there is no evidence linking Chase to this act.
Chase is accused of falsely declaring the Robeys in default and initiating foreclosure proceedings in North Carolina, but the Complaint does not clarify where this declaration was made. Despite numerous alleged deficiencies and a fraudulent deed, Chase, its representatives, and the Clerk of Court proceeded with the foreclosure, culminating in the Robeys' eviction—all of which took place in North Carolina.
While the Plaintiffs also claim that Chase filed a fraudulent proof of claim in their bankruptcy case in the Southern District of Florida, the Complaint does not emphasize the bankruptcy as central to their claims, which primarily focus on the North Carolina foreclosure and Chase's loan servicing actions. The Plaintiffs failed to show that a significant part of Chase's actions occurred in the relevant District, suggesting that any connection is indirect and ancillary. The Complaint's allegations, even if true, do not establish a proximate cause linking Chase's actions to the Plaintiffs' claims. Precedents indicate that the venue for claims like wrongful eviction typically lies where the eviction occurred—in this case, North Carolina, where the property is located and where the foreclosure actions were concentrated. Therefore, any quiet title action should be pursued in Maryland, where the property is situated.
In cases involving in personam claims related to fraud and conspiracy, jurisdiction is determined by where the alleged wrongful acts occurred. In Riley v. Donatelli, a case concerning RICO and fraud claims tied to property in New York, the court ruled that the dispute should be litigated in New York due to the submission of false documents and the theft of property, despite the plaintiff being in Florida. The plaintiffs failed to meet the burden of establishing venue under 28 U.S.C. § 1391(b)(2).
The complaint alleges that Chase, while a citizen of another state, regularly conducts business in Florida, including servicing a loan and appearing in bankruptcy court. Communications occurred between Chase and the Robeys in Florida, and there is a claim of a fraudulent notary attestation from a Florida notary. Although the complaint does not explicitly state that Chase "resides" in this district, the plaintiffs argue that the facts presented support this claim, which Chase addresses in its response.
For venue, a corporation like Chase is deemed to reside in any district where it is subject to personal jurisdiction (28 U.S.C. § 1391(c)(2)). In Florida, the personal jurisdiction analysis focuses on specific contacts within the district rather than the state as a whole. The court must evaluate whether Chase is subject to personal jurisdiction by assessing compliance with Florida's long-arm statute (Fla. Stat. § 48.193(1)(a)(2)) and ensuring that exercising jurisdiction adheres to the due process requirements of the Fourteenth Amendment.
The Florida long-arm statute allows for personal jurisdiction through specific and general jurisdiction. General jurisdiction grants the forum state authority over any cause of action against a defendant, irrespective of the origin of the action. In contrast, specific jurisdiction is limited to causes of action directly related to the defendant's actions within the forum. The plaintiffs claim that personal jurisdiction over Chase is justified because Chase conducts business in the district, sent loan-related correspondence, made false representations in bankruptcy proceedings, and had a deed notarized in Miami. However, Chase has not contested these claims with affidavits, leading the court to accept the facts as true while still requiring the plaintiffs to prove that venue is appropriate.
The court finds that the plaintiffs have not demonstrated general personal jurisdiction over Chase, as their evidence does not show that Chase is "essentially at home" in Florida, a requirement established by the Supreme Court. The key factors for general jurisdiction are a corporation's place of incorporation and principal place of business, with additional considerations for continuous and systematic affiliations. The plaintiffs’ vague assertions about Chase's business activities do not meet the required standard.
Additionally, the plaintiffs have failed to establish specific personal jurisdiction, as they have not sufficiently shown a direct connection between Chase's activities and the claims in their complaint. Chase contends that there is no substantial connection with the district related to the claims, and for specific jurisdiction to be valid, the defendant's conduct must create a significant link to the forum state.
To establish specific personal jurisdiction without infringing on due process, a defendant's actions in the forum state must be a "but-for" cause of the plaintiff's claims. Jurisdiction cannot be based on contacts that are random or fortuitous. Sending correspondence to the forum state does not suffice to establish specific personal jurisdiction, as illustrated by a case where a corporation's communications and office lease in Virginia were insufficient for claims of human trafficking. Similarly, any notarization-related contact with the district was deemed ancillary and did not demonstrate a substantial connection to support jurisdiction. The Court noted that even if notarization occurred at the defendant's request, it did not indicate a significant link to the district, as it was merely a random contact. Furthermore, involvement in a Florida bankruptcy proceeding did not provide fair notice for jurisdiction in Florida regarding claims of wrongful foreclosure and fraud, as this proceeding was incidental to the main claims. Generic allegations of loan servicing activities within the district also failed to establish specific jurisdiction, as there were no concrete claims linking the loan servicer's actions to the district. The only relevant evidence identified was limited to a Qualified Written Request (QWR) sent to Jacksonville, Florida. Consequently, the plaintiffs did not meet their burden to establish venue under 28 U.S.C. § 1391(b)(1). Given that the suit was filed in the wrong district, the Court evaluated the appropriateness of transferring the case under 28 U.S.C. § 1406(a) instead of dismissing it, as such a transfer may serve the interest of justice.
Under 28 U.S.C. § 1406(a), the Court has discretion to either dismiss or transfer a case. In this instance, neither Chase nor the Plaintiffs provided justification against transferring the case to the Western District of North Carolina, despite the relevance of the venue. Given that the events underlying the Plaintiffs' claims occurred between 2009 and 2015 and that the key facts and witnesses are located in Watauga County, North Carolina, the Court finds transfer appropriate. The likelihood of North Carolina law governing the state-law claims further supports this decision. The Court has granted the motion to transfer, denied all pending motions as moot, canceled all hearings, and directed the Clerk of Court to administratively close the case following the transfer. The document notes that the property in question is located in Watauga County and highlights issues regarding the authenticity of signatures on the Deed attached to the Complaint.
Plaintiffs claim that their Qualified Written Request (QWR) sought the original Note, asserting that Mr. Robey was not informed of Chase's formal takeover of his Loan. However, the QWR only requests a detailed mortgage transaction account history, lacking the alleged request for the original Note. The Complaint names Defendants Does 1-20 without specific allegations, merely identifying them as unknown entities potentially responsible for the alleged wrongs. Plaintiffs also intend to drop several counts from their Complaint, but this is procedurally flawed as they must seek the Court's permission for a second amendment. The Complaint cites the Fair Debt Collection Practices Act (FDCPA) and the Racketeer Influenced and Corrupt Organizations Act (RICO), with venue considerations governed by both statutes and 28 U.S.C. 1391. The Court notes that proper venue analysis is not addressed, as Plaintiffs predominantly focus on 28 U.S.C. 1404(a), which is irrelevant if venue is not established. Consequently, the Court concludes that Plaintiffs have not demonstrated that the venue in this District is appropriate.
