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Trice v. Federal Deposit Insurance Corp.

United States District Court, District of Columbia

April 22, 2019




         After at least five unsuccessful challenges to the foreclosure sale of her property in Nevada, pro se Plaintiff Geraldine Trice brings this action against the Federal Deposit Insurance Corporation (“FDIC”), which denied her administrative claim involving the servicing of her mortgage loan account. The FDIC seeks dismissal of this lawsuit pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim upon which relief may be granted. ECF No. 7. For the reasons set forth below, the court will grant the FDIC's motion to dismiss.

         I. BACKGROUND

         In 1999, Trice executed a mortgage note and trust deed in favor of Washington Mutual Bank (“WaMu”). Compl. ¶ 48; Compl. Ex. 1-1 at ECF p. 64.[2] Rather than requiring Trice to make payments that included escrow amounts for taxes and insurance, WaMu allowed her to pay her insurance and taxes directly. ECF No. 11 Pls. Response at p. 2; Compl. Ex. 1-1 at ECF p. 83. WaMu closed in September 2008 and the FDIC was appointed as its receiver. Compl. ¶ 51; see Alkasabi v. Wash. Mut. Bank, F.A., 31 F.Supp.3d 101, 104 (D.D.C. 2014). JPMorgan Chase Bank, N.A. (“Chase”) later acquired WaMu's assets, along with the right to service the loans in WaMu's portfolio. Compl. Ex. 1-1 at ECF p. 122.

         On September 30, 2009, approximately one year after WaMu closed, Trice received a letter from Chase notifying her that it would formally begin servicing her loan. See Compl. Ex. 1-1 at ECF p. 80. Sometime later, Chase notified Trice that-consistent with the terms of her mortgage agreement-going forward, her payments would include escrow amounts because Chase had paid a delinquent tax bill on her behalf. Id. at ECF p. 83. Accordingly, Chase demanded that Trice remit future mortgage payments that included the escrow amounts and warned her that the bank would not consider her account in good standing if she submitted partial payments. Id. Despite receiving this notification, Trice admits that she did not send payments that included the escrow amount, and instead kept paying both the insurance and taxes directly. Compl. ¶ 7; Pls. Resp. at p. 3.

         Ultimately, Trice's property was sold at a non-judicial foreclosure sale. See Trice v. Nat'l Default Servicing Corp., No. 2:16-CV-2101-GMN-GWF, 2017 WL 3925413 (D. Nev. Sept. 6, 2017). Trice unsuccessfully sued Chase twice in Nevada state court over the foreclosure, but the Nevada Supreme Court affirmed the lower court decisions in both cases.[3]See Trice v. J.P. Morgan Chase Bank, No. 63052, 2013 WL 5432353 (Nev. Sept. 20, 2013); Trice v. J.P. Morgan Chase Bank, No. 66586, 2015 WL 1858865 (Nev. Apr. 17, 2015). Trice also unsuccessfully sued Chase, along with other defendants, in three Nevada federal actions, one of which was affirmed on appeal. Trice v. J.P. Morgan Chase Bank, No. 2:15-cv-01614-APG-NJK, 2015 WL 10743195 (D. Nev. Nov. 18, 2015), aff'd sub nom. Trice v. J.P. Morgan Chase Bank, N.A., 672 Fed.Appx. 679 (9th Cir. 2016); Trice v. Damion, No. 2:16-cv-01348-MMD-NJK, 2017 WL 187149(D. Nev. Jan. 17, 2017); Trice v. Nat'l Default Servicing Corp., No. 2:16-cv-02101-GMN-GWF, 2017 WL 3925413 (D. Nev. Sept. 6, 2017).

         In June 2016, the FDIC sent Trice a letter indicating that she might have a claim against WaMu, and providing instructions for filing a claim. Compl. Ex. 1-1 at ECF p. 2. Trice submitted a claim on August 16, 2016, [4] in which she challenged the foreclosure and alleged, inter alia, that Chase had unlawfully required her to include the escrow amounts in her mortgage payment. Id. at ECF pp. 5-21; see Compl. ¶ 101 (“Plaintiff filed a claim with the [FDIC] seeking validation of Chase's successor in interest claim, but also to resolve the dispute that arose from Chase's unilateral decision to modify the pre receivership agreement between the Plaintiff and [WaMu] that enabled her to make direct payments of her property taxes and insurance.”).

         On August 31, 2016, the FDIC sent Trice a letter disallowing the claim because it “ha[d] not been proven to the satisfaction of the Receiver. 12 U.S.C. § 1821(d)(5)(D).” Compl. ECF No. 1-1 at ECF pp. 57-58. The letter informed Trice that if she disagreed with the agency's decision, she had sixty days from the date of the letter to file a lawsuit in federal court, and that if Trice did not file a timely lawsuit, the claim disallowance would become final and she would “have no further rights or remedies with respect to [the] claim.” Id. p. 57 (citing 12 U.S.C. § 1821(d)(6)(B)(ii)). The letter also informed Trice that she was required to file any lawsuit challenging the disallowance in the district where the failed institution's principal place of business was located or in the District of Columbia. Id.

         Although Trice admits that WaMu's principal place of business was in the Western District of Washington, she did not seek timely judicial review of the FDIC's decision in that district or in the District of Columbia. ECF No. 3, Pls. Resp. to Show Cause Order at p. 3. Instead, within the prescribed sixty-day window, Trice sued Chase in one of the Nevada federal lawsuits discussed above, without naming the FDIC as a defendant. See Trice, 2017 WL 3925413. Sometime later, also within the sixty-day window, she moved to add the FDIC as a defendant, raising the same issues she raises in this suit. See Id. at ECF No. 12; Compl. Ex. 1-1 at ECF pp. 41-53.

         Almost one year after the FDIC disallowed her claim, on August 2, 2017, Trice filed suit in this court, seeking, inter alia, compensatory damages from the FDIC and a judicial declaration that her loan was “void as a result of Chase's” alleged misconduct. Compl. p. 37. Approximately one month later, the Nevada federal court denied Trice's motion to add the FDIC to her lawsuit against Chase and granted Chase's motion for summary judgment. Trice, 2017 WL 3925413.

         After the FDIC filed its motion to dismiss in this case, this court issued an Order warning Trice that if she failed to address any of the FDIC's arguments in her response, the arguments might be treated as conceded. ECF No. 8.


         When evaluating a motion to dismiss under Rule 12(b)(1), the court must “assume the truth of all material factual allegations in the complaint and ‘construe the complaint liberally, granting plaintiff the benefit of all inferences that can be derived from the facts alleged.'” Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (citation omitted). However, “‘the court need not accept factual inferences drawn by plaintiffs if those inferences are not supported by facts alleged in the complaint, nor must the court accept plaintiff's legal conclusions.'” Disner v. United States, 888 F.Supp.2d 83, 87 (D.D.C. 2012) (citation omitted). Additionally, the court “is not limited to the allegations of the complaint.” Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir. 1986), vacated on other grounds, 482 U.S. 64 (1987). Instead, “a court may consider such materials outside the pleadings as it deems appropriate to resolve the question [of] whether it has jurisdiction to hear the case.” Scolaro v. D.C. Bd. of Elections & Ethics, 104 F.Supp.2d 18, 22 (D.D.C. 2000) (citing Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992)).

         The law presumes that “a cause lies outside [the court's] limited jurisdiction” unless the party asserting jurisdiction establishes otherwise. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Thus, the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992).

         To withstand a Rule 12(b)(6) challenge, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted). In other words, the complaint must contain “a short and plain statement of the claim” and “the grounds for the court's jurisdiction” so that a defendant has fair notice of the claim and the grounds upon which it rests. Fed.R.Civ.P. 8(a); Erickson v. Pardus, 551 U.S. 89, 93 (2007). “In ruling on a motion to dismiss, the Court may consider not only the facts alleged in the complaint, but also documents attached to or incorporated by reference in the complaint and documents attached to a motion to dismiss for which no party contests authenticity.” Demissie v. Starbucks Corp. Office & Headquarters, 19 F.Supp.3d 321, 324 (D.D.C. 2014).

         III. ANALYSIS

         Trice alleges that the FDIC violated the Financial Institutions Reform, Recovery, and Enforcement Act's (“FIRREA”) provisions requiring notice explaining the reasons for disallowing FDIC claims: 12 U.S.C. §§ 1821(d)(5)(A)(iv), [5] 1821(d)(5)(D), [6] 28 C.F.R. § 14.9.[7] Similarly, Trice alleges that the FDIC violated the Real Estate Settlement Procedures Act (“RESPA”) by failing to give her notice when her loan was transferred to a new servicer. See Compl. ¶¶ 25, 36, 40, 46 (citing 12 U.S.C. § 2605(c)(2)(B)(iii)).[8]. She also claims the FDIC violated 42 U.S.C. § 1986 by failing to prevent a conspiracy involving Chase, Compl. ¶¶ 94-103, and claims the FDIC engaged in fraudulent misrepresentation/concealment, id. ¶¶ 60-65, ¶¶ 80- 93, as well as deceptive trade practices, id. ¶¶ 66-79. Finally, in her reply brief, Trice attempts to add claims under the Administrative Procedure Act (“APA”), 5 U.S.C. § 706, and the Federal Tort Claims Act (“FTCA”), 28 U.S.C. § 2671 et seq.[9]

         A. FIRREA

         FIRREA was enacted “to enable the FDIC to expeditiously wind up the affairs of literally hundreds of failed financial institutions throughout the country.” Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1141 (D.C. Cir. 2011) (citations and alterations omitted). Consistent with this mission, after a financial institution is declared insolvent, the FDIC must publish notice of the institution's liquidation and mail notice to entities or persons who may have claims against the institution. Office & Prof'l Emps. Int'l Union, Local 2 v. FDIC, 962 F.2d 63, 65 (D.C. Cir.1992) (citation omitted); Brady Dev. Co. v. Resolution Tr. Corp., 14 F.3d 998, 1002-03 (4th Cir.1994) (cited with approval in Muhammad v. FDIC, 448 Fed.Appx. 74');">448 Fed.Appx. 74, 75 (D.C. Cir. 2012)). The processing schedule for such claims is as follows:

Congress established an administrative scheme for processing the claims received after publication and mailing of notices. 12 U.S.C. §§ 1821(d)(5)-(14). After a claimant submits a claim to the [FDIC] . . . ., the [FDIC] has 180 days in which to allow or disallow the claim. 12 U.S.C. § 1821(d)(5)(A)(i). The claim is essentially tolled during this 180 day administrative review. If the [FDIC] disallows the claim or the 180 day period expires without [FDIC] action, then the claimant has sixty days to seek further administrative determination or judicial relief. 12 U.S.C. § 1821(d)(6)(A). If the claimant fails to file suit or seek administrative review within sixty days of the denial or non-action, then the claim is deemed permanently disallowed. 12 U.S.C. § 1821(d)(6)(B).

Brady, 14 F.3d at 1003. “Congress instructed district courts to ‘determine' claims against failed banks de novo, rather than merely to review, for error or abuse FDIC's . . . decision[].” Office & Prof'l Emps. Int'l ...

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