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Yocum v. Nationstar Mortgage, LLC

United States District Court, N.D. Alabama, Southern Division

August 24, 2017

JAMES A. YOCUM, JR., Plaintiff,
v.
NATIONSTAR MORTGAGE, LLC, et al., Defendants.

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

          STACI G. CORNELIUS U.S. MAGISTRATE JUDGE.

         This matter is before the undersigned on the motion for sanctions filed by Nationstar Mortgage, LLC (“Nationstar”), on May 23, 2017. (Doc. 68). In its motion, Nationstar asserts this action is due to be dismissed because Plaintiff has repeatedly made false statements to the court. (Id.). Nationstar also seeks attorneys' fees and costs. (Id.). The motion is fully briefed and ripe for review. (Docs. 72, 73). For the reasons discussed below, the undersigned recommends dismissal without prejudice as an appropriate sanction and further recommends the court retain jurisdiction to determine whether costs, including attorneys' fees and expenses, should be taxed to Plaintiff James A. Yocum, Jr.

         I. FACTS AND PROCEDURAL HISTORY

         A. Plaintiff's Pleadings

         1. First Amended Complaint

         Plaintiff James Yocum initiated this action pro se by filing a verified complaint in the Circuit Court of Jefferson County, Alabama, on April 18, 2014. (Doc. 1-1 at 2). Nationstar removed this case to federal court on May 23, 2014. (Doc. 1). On May 29, 2014, Plaintiff filed his first amended complaint (the “FAC”). (Doc. 5). In the FAC, Plaintiff asserted claims against Nationstar and Renasant Bank (“Renasant”) pursuant to the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq. (“RESPA”), the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq. (“TILA”), and the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”). (Id.). Mr. Yocum also sought a declaratory judgment that he has a right to undisturbed possession of the subject property (the “Property”) and asserted a state law claim to quiet title against Nationstar and Renasant pursuant to Ala. Code § 6-6-560 et seq. (Id.).

         On January 15, 2016, the undersigned entered a report recommending all claims be dismissed without prejudice and that Plaintiff be permitted to file a final complaint “satisfactorily address[ing] the deficiencies” in his FAC. (Doc. 33 at 21). After objections were received, U.S. District Judge Madeline Haikala entered a memorandum opinion and order. (Doc. 39). The order adopted the findings and recommendations in the report, with the exception that Mr. Yocum's quiet title action was found to state a claim upon which relief could be granted against Renasant Bank. (Id. at 5-6).

         While Plaintiff objected to the undersigned's recommendation that he be limited to one final amendment, the court overruled his objection and found that “[g]iven Mr. Yocum's extensive litigation in Yocum v. BAC Home Loans Servicing LP, 2:10-cv-02574-AKK and the bankruptcy actions, [] and his previous amendment in this action, justice and Federal Rule of Civil Procedure 15(a)(2) do not require more than one additional opportunity to amend.” (Id. at 12). The court dismissed without prejudice the remaining claims in Mr. Yocum's complaint, stating, “Mr. Yocum may replead those claims in accordance with the guidance provided in the magistrate judge's report and recommendation and this memorandum opinion and order.” (Id.).

         2. Second Amended Complaint

         On October 11, 2016, Plaintiff, through counsel, filed a second amended complaint (the “SAC”). (Doc. 51). In the SAC, which consists of 213 pages, Plaintiff added several parties and claims, contrary to the instructions of the report and recommendation and the district judge's memorandum opinion and order. Specifically, Plaintiff added defendants Bank of America, N.A.; Sirote & Permutt, PC; Ginny Rutledge; and Andy Saag. He also added various claims, including claims under sections of the FDCPA which had not been raised in the FAC.[1] In a report and recommendation entered following a hearing held with the parties, the undersigned expressed the view that the SAC went well beyond the scope permitted by the district judge's memorandum opinion and order. (Doc. 64). The undersigned recommended the SAC be struck to the extent it exceeded the court's instructions and that only those claims asserted in the FAC, as repleaded in the second amended complaint, be permitted to proceed. (Id. at 2). The report and recommendation as to the SAC remains pending.

         B. Plaintiff's False Allegations And Related Facts

         1. Plaintiff's statements and omissions in the instant case

         In the SAC, Plaintiff alleges he “has superior title to the subject real property in fee simple title, by virtue of a Statutory Warranty Deed granted to him by Patricia Morris Yocum on November 7, 2000…” (Doc. 51 at 3).[2] This deed was granted to Plaintiff by virtue of a final divorce judgment recorded in Jefferson County on November 15, 2000. (Id. at 4). No party disputes this transfer occurred and was valid.

         Plaintiff further alleges he executed a mortgage and note in favor of Renasant Bank in 2005. (Id.). Following several transfers of the mortgage, which Plaintiff contends were fraudulent or otherwise defective, Nationstar eventually became involved as a servicer of the note. (See, e.g., Doc. 51 at 24-27). Yocum's remaining allegations and claims are directed at the conduct of the defendants, including the individual attorney defendants, as they corresponded with Plaintiff and took other actions toward foreclosing on the mortgage and forcing a sale of the Property. Generally speaking, Plaintiff alleges the defendants' representations in their correspondence and legal process were false, misleading, or fraudulent because they misrepresented the defendants' status and interest in the debt and the Property or because they failed to follow the proper procedures in seeking to enforce whatever interest they rightfully had. These allegations are offered in support of Plaintiff's FDCPA, RESPA, and TILA claims; his quiet title and declaratory judgment claims seek to have the court establish Plaintiff's ownership of the Property.

         In its motion for sanctions, Nationstar asserts Plaintiff conveyed the Property in fee simple to the 3417 Danner Circle Trust (the “Danner Circle Trust”) by executing a statutory warranty deed on March 24, 2010. (Doc. 68-1 at 1). The mailing address for the Danner Circle Trust is listed on the statutory warranty deed as “PMB 364, 1919 Oxmoor Road, Birmingham, AL 35209.” (Id. at 2). The statutory warranty deed was recorded in Jefferson County on March 25, 2010. (Id. at 3).

         On May 5, 2010, Plaintiff executed a quitclaim deed, conveying any remaining interest in the Property from Plaintiff to the Danner Circle Trust. (Doc. 68-1 at 4). The quitclaim deed lists the Danner Circle Trust's address as 3417 Danner Circle, Birmingham, AL 35243. (Id.). This deed describes the trust as a “private contract trust” and identifies the trustee as Cynthia G. Beeckman. (Id.). No further details about the nature of the trust or its terms are listed. (Id.). The quitclaim deed includes language which purports to “remove[]/release[]/discharge[]” the “Mortgagee(s), Successor Mortgagee(s), Substituted Mortgagee, Agent(s), Servicer(s), Assign(s), Transfer(s), known and unknown.” (Id. at 5). This language specifically mentions Renasant Bank, Bank of America, N.A., Capital South Bank, Iberia Bank, and MERS. (Id.). The quitclaim deed was recorded in Jefferson County on May 6, 2010. (Id. at 4).

         Plaintiff did not disclose these facts in his pleadings. At the time the motion for sanctions was filed, there had been no further conveyances of the Property since 2010, and it appeared the Trust was still the owner of the Property. (Doc. 68 at 7). Nevertheless, Plaintiff stated in his initial verified complaint that he “was and is the owner of the property” and he had never sold or intended to irrevocably grant or convey the Property to any party. (Doc. 1-1 at ¶¶ 7, 13-14). Yocum made identical allegations as to his ownership of the Property in the FAC. (Doc. 5). Because the documents creating the Danner Circle Trust are not before the court, the undersigned cannot evaluate whether Plaintiff could be considered the owner of the property. However, it is clear from the conveyance by statutory warranty deed, and later by quitclaim deed, that Plaintiff did intend to convey the Property to another party - i.e., the Danner Circle Trust or its trustee, Cynthia Beeckman.

         In light of the district judge's order that he would be permitted one final opportunity to amend, Plaintiff was granted several extensions of time to obtain counsel and amend his complaint. (Docs. 43, 47, 49). On October 11, 2016, Plaintiff filed the SAC and alleged the same facts regarding ownership and conveyance of the Property as he made in the initial complaint and FAC. Specifically, he stated:

Plaintiff, is at all times herein mentioned the owner and/or entitled to possession of the property located at 3417 Danner Circle, Birmingham, AL 35243… Plaintiff is, and has been, in continuous possession of the Property. … Plaintiff does not have a landlord-tenant relationship with any person. Plaintiff has never sold the Property, and has never intended to irrevocably grant or convey the Property to any party.

(Doc. 51 at 198) (emphasis added). Plaintiff also stated the following:

The Plaintiff herein claims he has superior title to the subject real property in fee simple title, by virtue of a Statutory Warranty Deed granted to him by Patricia Morris Yocum on November 7, 2000 ….

(Doc. 51 at 3).

         2. Plaintiff's statements and omissions in other litigation

         As Nationstar points out in its motion for sanctions, Plaintiff has made similar statements about the Property in the course of litigation in other venues.[3] Shortly following the 2010 conveyances to the Danner Circle Trust, Plaintiff filed for bankruptcy in the Northern District of Alabama (“Bankruptcy I”). In re: James Albert Yocum, Jr., No. 10-04284-BGC-13 (Bankr. N.D. Ala. filed Jul. 15, 2010). On July 30, 2010, Plaintiff filed a schedule in which he listed the Property as his homestead and stated his interest in it was worth $400, 000. Bankruptcy I at Doc. 23, p. 3; see also (Doc. 68-4). In his statement of financial affairs filed the same day, Plaintiff stated he had made no “other transfers” besides those listed, which did not include the transfers of the Property. (Doc. 68-4 at 20). He stated he had not transferred any other property “either absolutely or as security within two years immediately preceding” the commencement of the 2010 bankruptcy case. (Id.). Notably, in that same section, Plaintiff further stated he had not transferred any property within the last ten years to any “self-settled trust or similar device of which [he] is a beneficiary.” (Id.).

         Approximately two months after filing Bankruptcy I, Plaintiff, proceeding pro se, filed a civil action in this court (“Yocum I”), centered on the same Property at issue here. Yocum v. BAC Home Loans Servicing, LP, 2:10-cv-02574-AKK (N.D. Ala. filed September 22, 2010). On March 9, 2011, another judge in this district struck Plaintiff's amended complaint[4] and warned him about his failure to comply with the rules of pleading. Id. at Doc. 13. He was specifically admonished to pay heed to Rule 11's standard regarding factual allegations. Id. at 5.

         In 2011, Plaintiff filed for Chapter 13 bankruptcy again (“Bankruptcy II”). In re: James Albert Yocum, Jr., No. 11-01997-BGC-13 (Bankr. N.D. Ala. filed Apr. 8, 2011). On April 8, 2011, Plaintiff filed a Schedule A in which he stated, as he had done in Bankruptcy I, that his interest in the Property was valued at $400, 000. Id. at Doc. 2, p. 3; see also (Doc. 68-5).

         In 2012, Plaintiff filed for Chapter 13 bankruptcy (“Bankruptcy III”). In re: James Albert Yocum, Jr., No. 12-00008-BGC-7 (Bankr. N.D. Ala. filed Jan. 3, 2012).[5] Plaintiff made similar statements in this petition as he made in his previous bankruptcy filings. (Doc. 68-6). On March 20, 2013, Bankruptcy III was closed without discharge upon the court's finding that Plaintiff had “concealed records, if there were ...


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