U.S. Government v. Nola Devries

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

FRANK T. PEARSON and

DONNA K. PEARSON,

Plaintiffs,

v. Case No. 3:19-CV-972-NJR

NOLA DEVRIES, FORRESTON

MUTUAL INSURANCE, NORM

BRAND, TOM DOOLEY, DOOLEY

CLAIMS SERVICE, ALL BOARD

MEMBERS OF FORRESTON MUTUAL

INSURANCE, and ALL OWNERS OF

FORRESTON MUTUAL,

Defendants.

MEMORANDUM AND ORDER

ROSENSTENGEL, Chief Judge:

This matter is before the Court on the Motion to Dismiss Plaintiffs’ Amended

Complaint filed by Defendants Forreston Mutual Insurance Company (“Forreston

Mutual”), Nola Devries, Tom Dooley, Norm Brand, and Dooley Claims Service (Doc. 35).

Defendants assert this Court lacks subject matter jurisdiction and, thus, the Complaint

must be dismissed. Alternatively, they argue Plaintiffs have failed to state a claim.

Plaintiffs Donna and Frank Pearson filed a timely response in opposition (Doc. 36).

PROCEDURAL HISTORY

On September 4, 2019, the Pearsons filed the Complaint in this matter purportedly

on behalf of themselves, the United States Government, the United States Department of

Veterans Affairs (VA), and the Secretary of Veterans Affairs, alleging a conspiracy by

Defendants to defraud the Government and anyone who files a claim with Forreston

Mutual for damage or loss on a homeowners’ policy (Doc. 1). Specifically, the Pearsons

alleged that in August 2019, they filed a claim with Forreston Mutual for total roof

damage on property secured by a VA loan (Id. at pp. 4-5). The Pearsons claimed they

suffered complete roof damage, a loss of all ceilings in their house, and a total loss of all

objects and furniture in their home due to rain, hail, mold, and mildew (Id. at p. 5). When

Dooley Claims Service, hired by Nola DeVries of Forreston Mutual, found no damage,

Forreston Mutual denied the claim (Id. at p. 6). The Pearsons alleged this conduct was

part of a grand conspiracy to defraud the VA and the United States Government. They

also alleged the actions constituted a crime and that they rose to the level of elder abuse

as to Plaintiff Frank Pearson. The Pearsons sought compensatory damages and punitive

damages of $5 billion from each Defendant (Id. at p. 7).

The Court granted Defendants’ motion to dismiss the original Complaint, finding

Plaintiffs had no authority to use 18 U.S.C. § 371, a criminal statute, to bring their

conspiracy to commit fraud claim (Doc. 29). The Court further dismissed the U.S.

Government, the VA, and the Secretary of Veterans Affairs as plaintiffs because a non-

lawyer cannot handle a case on behalf of anyone except him- or herself (Id.). The Court

noted, however, that it must liberally construe pro se complaints and that Illinois law

recognizes the intentional tort of conspiracy to commit fraud (Id.). The Court would only

have subject matter jurisdiction over such a claim, however, if the parties were

completely diverse under 28 U.S.C. § 1332. Because there were no allegations in the

Complaint supporting federal diversity jurisdiction, and no basis for federal question

jurisdiction, the Court dismissed the complaint without prejudice. The Pearsons were

granted leave to file an Amended Complaint within 30 days that set forth the parties’

citizenship for purposes of diversity jurisdiction under 28 U.S.C. § 1332.

On April 30, 2020, the Pearsons filed an Amended Complaint alleging that federal

courts have jurisdiction over cases and controversies between citizens and corporations

of the same state involving lands under grants of a different state (Doc. 31). Because the

land in question in this lawsuit is under mortgage to Carrington Mortgage Company in

Phoenix, Arizona, the Pearsons assert that subject matter jurisdiction is proper in this

Court.

MOTION TO DISMISS

Defendants again move to dismiss the Amended Complaint, arguing that the

Pearsons still have not established this Court’s subject matter jurisdiction, nor have they

properly set forth the parties’ citizenship for purposes of diversity jurisdiction (Doc. 35-

1). While the Pearsons reference an Arizona mortgage company and the VA, conclusory

assertions of “controversies” between sovereigns, without any factual support, must be

disregarded. Because the Pearsons’ vague references to a VA loan and land “under grant”

to an out-of-state mortgage corporation cannot establish a federal controversy, the

Amended Complaint should be dismissed for lack of subject matter jurisdiction.

In response, the Pearsons now claim that Carrington Mortgage Company is a

defendant in this matter. Because Carrington Mortgage is “incorporated in Arizona and

California,” and not in Illinois, diversity of citizenship exists among the parties. The

Pearsons include a copy of the Civil Cover Sheet, in which “Carrington Mtg.” is written

and highlighted under the “Defendants” section (Doc. 36 at p. 2). This notation was not

present on the Civil Cover Sheet attached to the original Complaint (Doc. 2-1). The

Pearsons assert that if someone would just “pay attention” to this case, it would be clear

that federal question and diversity jurisdiction have existed since the case was filed.

DISCUSSION

Under 28 U.S.C. § 1332(a)(1), district courts have original jurisdiction over all civil

actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of

interest and costs, and is between citizens of different States. “Citizenship” for diversity

purposes is determined by a party’s domicile, which means the state where a party is

physically present with an intent to remain there indefinitely. See Salem v. Egan, 803 F.

App’x 928, 931 (7th Cir. 2020); Myrick v. WellPoint, Inc., 764 F.3d 662, 664 (7th Cir. 2014).

Despite being instructed to provide the citizenship of all parties, the Pearsons

again have failed to provide this information in the Amended Complaint. Other than a

reference to Carrington Mortgage Company, which allegedly is located in Arizona and

California, the Amended Complaint is devoid of any information regarding the parties’

citizenship. And in any event, Carrington Mortgage Company is not a party to this

action.1 Thus, Plaintiffs have failed to establish diversity jurisdiction under 28 U.S.C.

§ 1332(a)(1).

1 Carrington Mortgage Company was not added as a party to this action by way of the Amended

Complaint, nor has it ever been served with a summons and complaint. The fact that Plaintiffs wrote in

“Carrington Mtg.” on the Civil Cover Sheet after the fact and attached it to their response to Defendants’

Motion to Dismiss does not make it a party to this action.

There also is no subject matter jurisdiction based on the Pearsons’ assertion that

federal courts may hear controversies between citizens of the same state claiming lands

under grants of different states. See U.S. CONST,, art. IIL § 2, cl. 1. This is not an action to

quiet title to land granted by a state. See Stevenson v. Fain, 195 U.S. 165, 165 (1904)

(discussing Article III, Section 2 in the context of two parties claiming title to land

allegedly granted to their ancestors by the states of Tennessee and North Carolina); Port

of Portland v. Tri-Club Islands, Inc., 315 F. Supp. 1160, 1160 (D. Or. 1970) (subject matter

jurisdiction was proper where plaintiffs claimed title to land under a deed from the State

of Oregon and Defendants claimed title to the same land under deed from the State of

Washington). Instead, this appears to be a breach of contract case that belongs, if

anywhere, in state court.

Because Plaintiffs have failed to establish federal subject matter jurisdiction, this

action is DISMISSED with prejudice. The Clerk of Court shall enter judgment

accordingly and close the case.

IT IS SO ORDERED.

DATED: September 21, 2020

Tene Mowstg!

NANCY J. ROSENSTENGEL |

Chief U.S. District Judge

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