United States District Court, S.D. Alabama, Southern Division
WILLIAM H. STEELE UNITED STATES DISTRICT JUDGE.
matter is before the Court on the following motions: (1) the
motion of defendant Wells Fargo Bank, N.A. (“Wells
Fargo”) to dismiss, (Doc. 4); (2) the motion of
defendant Specialized Loan Servicing, LLC
(“Specialized”) to dismiss, (Doc. 11); (3) the
plaintiff's motion to remand, (Doc. 13); and (4) the
plaintiff's motion “to find judgment.” (Doc.
defendants removed this action from state court based on
diversity of citizenship. Diversity jurisdiction plainly
exists: the plaintiff is a citizen of Alabama, the defendants
are citizens of South Dakota and Australia, respectively, and
the complaint explicitly demands recovery in excess of $75,
000, exclusive of interest and costs. (Doc. 1 at 2-3; Doc.
1-2 at 6, 8). Although the plaintiff's motion is styled
as one to remand, it does not identify any jurisdictional or
procedural defect with removal, and none exists. Accordingly,
the motion to remand is denied.
plaintiff's second motion seeks entry of default and
default judgment against Specialized for failure to respond
to the complaint in the time allowed by law. “When a
party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend, ” it is
subject to entry of default. Fed.R.Civ.P. 55(a). But a
defendant is under no obligation to plead or otherwise defend
until and unless it is “served with the summons and
complaint.” Id. Rule 12(a)(1)(A)(i);
accord Securities and Exchange Commission v. Wright,
261 Fed.Appx. 259, 261 (11th Cir. 2008). Thus,
“[b]efore a default can be entered, … the party
must have been effectively served with process.” 10
Charles Alan Wright & Arthur R. Miller, Federal
Practice & Procedure § 2682 at 14
(3rd ed. 1998).
argues, correctly, that good service of process was never
effected on it. (Doc. 18). The plaintiff attempted to serve
Specialized by certified mail directed to the entity at a
post office address; no individual recipient was identified.
(Doc. 1-2 at 36). Alabama law is clear that “service on
a corporation or business entity cannot be perfected by
certified mail addressed merely to the entity itself.”
Ex parte Lereta, LLC, 226 So.3d 140, 145 (Ala.
2016). In addition, by federal law a defendant is provided a
minimum of seven days following removal in which to file a
responsive pleading. Fed.R.Civ.P. 81(c)(2)(C). Removal was
accomplished on April 15, 2019, and Specialized answered the
complaint on April 22, 2019, seven days later. (Doc. 2). For
both these reasons, the plaintiff's motion for entry of
default and default judgment is
pro se complaint is not a model of clarity and
consists chiefly of documents rather than allegations, but
the general drift is as follows. The plaintiff borrowed money
from Wells Fargo or its predecessor and gave Wells Fargo a
note and mortgage. In October 2016, the plaintiff became a
“private banker, ” reflected by his receipt of a
certificate from the Private Banker National Banking
Association (“the Association”). The Association
authorized the plaintiff to create promissory notes to pay
off his debts, with the notes purportedly issued against the
federal government's obligations and purportedly
constituting legal tender and United States currency. (Doc.
1-2 at 26-27).
November 2016, the plaintiff as private banker issued a
promissory note, by which he promised to pay Wells Fargo the
amount of $242, 000, to be paid in monthly installments of
$1, 400 against the obligations of the United States to that
part of the public debt due its principals and sureties. The
note included the following language:
After acceptance and not returned no later than the second
banking day after receipt, Holder has accepted this payoff
and full settlement and discharge of this debt by
acquiescence under FRCP, rule 8 and the Administrative Act of
1946. The payment or payoff is to be obtained on this day
from the ISSUER at 5100 Zimco Road Grove Hill, Alabama 36451.
(Doc. 1-2 at 20, 24). The plaintiff mailed the note to Wells
Fargo's CFO, along with a cover letter confirming that
the note was in “full satisfaction of the claimed
loan” to the plaintiff. (Id. at 21, 25).
later, the plaintiff wrote the CFO asserting that: Wells
Fargo failed to appear on his doorstep on December 7, 2016 to
pick up a check for $242, 000, as specified by the
plaintiff's note; that this failure resulted in Wells
Fargo's acceptance of the plaintiff's note as a new
contract; that, by this new contract, the plaintiff paid off
the original note with his note, resulting in a zero balance
on the original loan; and that Wells Fargo undoubtedly had
traded the plaintiff's note at its face value and thereby
had been paid in full for the plaintiff's underlying
debt. (Doc. 1-2 at 22).
only cause of action alleged in the complaint is against
Wells Fargo for breach of contract. (Doc. 1-2 at 6, 7, 8, 10,
11, 12, 14, 15, 16). The contract at issue is a
“bilateral mortgage payoff contract” allegedly
formed by the plaintiff's presentation of his note and
Wells Fargo's failure to reject it in the manner and
within the time specified by the plaintiff in the note; the
breach is alleged to consist in Wells Fargo's continued
demand for payment of the original debt and in its transfer
of the original note and mortgage to Specialized.
(Id. at 7, 11, 15; Doc. 13 at 2).
complaint and the plaintiff's note reference, among other
statutes, Public Law 73-10. (Doc. 1-2 at 19, 24). This
statute, pursuant to which the United States went off the
gold standard, is the fount of many an “untenable legal
theory, ” Wilkerson v. Gozdan, 2014 WL 4093279
at *4 (M.D. Ala. 2014), and in an abundance of caution Wells
Fargo addresses these theories. (Doc. 4 at 4-8). The
plaintiff, however, expressly disavows any “vapor
money” theory, (Doc. 13 at 1), and while his letter to
Wells Fargo's CFO mentions “redemption, ”
(Doc. 1-2 at 22), he plainly does not invoke redemption
theory. See Wilkerson, 2014 WL 4093279 at *5
(describing this theory). Any other theory the plaintiff
might envision based on Public Law 73-10 (though he asserts
none) would be equally bankrupt, as reflected in
Wilkerson and cases cited therein.
plaintiff's actual claim is the more mundane one that he
extended an offer to Wells Fargo via his promissory note,
which offer Wells Fargo accepted by inaction. Pursuant to
this new contract, the original debt was paid off and thereby
terminated and/or canceled, rendering efforts to collect the
debt or to transfer the debt instruments breaches of the new
contract. (Doc. 1-2 at 22). The plaintiff, in short, asserts
a novation or substituted contract. See generally Safeco
Insurance Co. v. Graybar Electric Co., 59 So.3d 649, 656
(Ala. 2010) (identifying the elements of a novation or
substituted contract and the difference between them).
basic elements of a contract are an offer and an acceptance,
consideration, and mutual assent to the essential terms of
the agreement.” Stacey v. Peed, 142 So.3d 529,
531 (Ala. 2013) (internal quotes omitted). Wells Fargo argues
that, assuming the plaintiff's note constituted an offer,