Mitchell v. U.S. Bank Nat'l Ass'n
Mitchell v. U.S. Bank Nat'l Ass'n
Opinion of the Court
A. BACKGROUND
In 2006, pro se Plaintiffs Beverley and M. Glenn Mitchell secured a $960,000 loan from Wells Fargo to purchase property located in the District of Columbia. ECF No. 1, ("Notice of Removal") at Ex. A, Compl. ¶¶ 1-3; ECF No. 7 (Defs. Br.) at Ex. B. After Plaintiffs began having difficulty paying their loan, they contacted Wells Fargo sometime in 2010 or early 2011 requesting a loan modification. Compl. ¶¶ 17-18. According to Plaintiffs, Wells Fargo took several years to offer a modification, later reneged on the offer and, during another round of modification negotiations in June 2015, unexpectedly filed a foreclosure proceeding in the District of Columbia Superior Court (hereinafter "Superior Court"). Id. ¶¶ 17-38; ECF No. 13 (Defs. Reply) at Ex. B.
Almost two years later, on May 3, 2017, Plaintiffs filed a complaint against Wells Fargo's Trustee, U.S. Bank National Association ("USBNA") in Superior Court. Id. at Ex. A. Several months later, however, the Superior Court dismissed Plaintiffs' lawsuit without prejudice because, according to Plaintiffs, their attorney became ill and failed to notify the court when he was unable to appear at a hearing. ECF No. 11 (Pls. Resp.) ¶ 6; Defs. Reply at Ex. A; Defs. Reply at 4 n.2.
Three days after their case was dismissed, Plaintiffs filed a seventy-six paragraph complaint against USBNA in Superior Court alleging that Wells Fargo has handled their mortgage modification request and the foreclosure proceedings fraudulently, in bad faith, and in violation of the District of Columbia Consumer Protection Procedures Act ("CPPA"). See Notice of Removal ¶ 1; Id. at Ex. A;
*212On October 6, 2017, Plaintiffs made an oral motion-over USBNA's objection-in the foreclosure proceeding requesting consolidation with their fraud lawsuit. Defs. Reply at Ex. B. The Judge denied the motion, advising Plaintiffs to file a written motion.
In response, Plaintiffs filed an "Objection of Removal" arguing that this action should not have been removed because it is "directly connected to the foreclosure case," and therefore the cases should not be "addressed separately." Pls. Resp. ¶ 1. Plaintiffs contend that USBNA acted in bad faith by removing this action in an effort to preempt Plaintiffs' attempts to consolidate it with the pending foreclosure action. Id. ¶ 8. Plaintiffs also contend that their fraud litigation would be unnecessary if USBNA would process their loan modification request in good faith. Id. ¶ 9.
USBNA construes Plaintiffs' response as a motion to remand and argues that Plaintiffs' request was untimely. See
In response, Plaintiffs-without leave of court-filed a "Notice of Withdrawal of Case" asking the court to "withdraw" or dismiss this matter without prejudice. ECF No. 14. Plaintiffs indicate that this case and the foreclosure case "address interconnected and related issues between the parties concerning" Plaintiffs' mortgage.
After admonishing the Plaintiffs for filing what amounts to a sur-reply without seeking leave, the court allowed USBNA to file a reply to Plaintiffs' "Notice." ECF No. 15. In the reply, USBNA confirmed that Plaintiffs have asserted a fraud counter-claim in the foreclosure action. ECF No. 16, (Defs. Second Reply) at 3. USBNA expressed consternation that "[a]t no time prior to removal, did the Plaintiffs seek to file any counterclaim in the then two-year-old Foreclosure Action," but rather chose to file two lawsuits asserting their fraud *213claims.
B. DISCUSSION
USBNA is correct that Plaintiffs have not set forth any arguments that might support remand. There is no indication jurisdiction is lacking or that the removal was defective. See
On the other hand, USBNA has not pointed to any legal barrier to dismissal of this action without prejudice. Pursuant to Federal Rule of Civil Procedure 41(a), a plaintiff may voluntarily dismiss an action, without consent of the defendant or the court, so long as the plaintiff files the notice of dismissal before the defendant files an answer or a motion for summary judgment. Moreover, "[t]he right of voluntary dismissal by notice prior to service of the answer or a motion for summary judgment extends as fully to cases removed from a state court as it does to cases commenced in a federal court." Wilson v. City of San Jose ,
Conversely, if the 12(b)(6) motion is accompanied by materials outside the pleadings and the court converts the motion to one for summary judgment under Rule 56, dismissal requires the consent of opposing counsel or court approval. See Black Ride III ,
satisfy itself: (1) that the motion is sought in good faith, and (2) that the defendants will not suffer "legal prejudice" if the case is dismissed. In re Vitamins Antitrust Litig.,198 F.R.D. 296 , 304 (D.D.C. 2000). "Legal prejudice" is determined by considering four factors: (1) the defendants' effort and expense in preparation for trial; (2) excessive delay or lack of diligence on the plaintiffs' part in prosecuting the action; (3) the adequacy of the plaintiffs' explanation for voluntary dismissal; and (4) the stage of the litigation at the time the motion to dismiss is made.Id. Voluntary dismissal is generally "granted in the *214federal courts unless the defendant would suffer prejudice other than the prospect of a second lawsuit or some tactical disadvantage." Conafay v. Wyeth Labs.,793 F.2d 350 , 353 (D.C. Cir. 1986).
In re Fed. Nat. Mortg. Ass'n Sec., Derivative, ERISA Litig. ,
Here, USBNA has relied on matters outside of the pleadings, but whether this court evaluates USBNA's motion under the Rule 12 standard
Applying the more exacting Rule 41(a)(2) standard, the court finds that Plaintiffs' desire to have their claims resolved in the foreclosure action provides an adequate explanation for voluntary dismissal, and the court finds no evidence that dismissal is sought in bad faith. See In re Fed. Nat. Mortg. Ass'n Sec., Derivative, ERISA Litig. ,
With respect to whether Plaintiffs were not diligent or engaged in excessive delay, it is unclear from the record why Plaintiffs waited almost two years after the foreclosure began to assert fraud/bad faith claims and why they elected to do so in a separate lawsuit, rather than in the foreclosure proceeding. It is significant, however, that Plaintiffs attempted to consolidate their claims with the foreclosure action prior to removal and have now raised them in the foreclosure proceeding. It is also significant that Plaintiffs claim that some of the allegedly fraudulent conduct occurred, and continues to occur during court-supervised foreclosure loan modification negotiations. See Notice of Removal at Ex. A, Compl. ¶¶ 7, 9. Accordingly resolution of the parties' overlapping claims-including any justifications for the delay in bringing the fraud claims-is better left to the foreclosure court. Indeed, such a course of action would promote judicial economy.
This court may grant a Rule 41(a)(2) motion to dismiss "on terms that the court considers proper." Fed. R. Civ. P. 41. Those "terms" include conditioning the dismissal on the payment of the defendant's attorneys' fees and costs. See Taragan v. Eli Lilly & Co. ,
While USBNA complains of the fees and costs it has incurred by seeking dismissal of Plaintiffs' claims twice and in removing this action, their complaint is puzzling given the fact that some of these costs would have been unnecessary had USBNA agreed to Plaintiffs' request for consolidation and not removed the action to this court. Thus, any costs arising from litigating the removal were not "unnecessary," but instead sprung from USBNA's own strategic decisions.
C. CONCLUSION
For the reasons set forth above, the court will deny USBNA's Rule 12(b)(6) motion to dismiss, as well as its request for fees. Instead, the court will treat Plaintiffs' Notice of Withdrawal as a Rule 41(a)(2) Motion to Dismiss and dismiss this action without prejudice.
Although Plaintiffs were represented by counsel in their Superior Court action, see Defs. Reply at Ex. A, they are proceeding without counsel in this court.
See Nolan v. Shulman, Rogers, Gandal, Pordy & Ecker, P.A. ,
USBNA implies that the court may treat this motion as a Rule 12(b)(6) motion, rather than a motion for summary judgment, by taking judicial notice of its exhibits from the state court docket and because some or all of the documents are undisputed and integral to the claims raised herein. See Defs. Br. at p 1-2 n.1.
Reference
- Full Case Name
- Beverley Marecheau MITCHELL and M. Glenn Mitchell v. U.S. BANK NATIONAL ASSOCIATION, as Trustee FOR WELLS FARGO ASSET SECURITIES CORPORATIONMORTGAGE PASS-THROUGH CERTIFICATES SERIES 2006-AR4
- Cited By
- 8 cases
- Status
- Published