Giles v. Community Loan Servicing, LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

LEWIS GILES, JR. CIVIL ACTION

VERSUS NO. 20-2238

BAYVIEW LOAN SERVICING, L.L.C. SECTION “R” (2)

AND DAVID ERTEL

ORDER AND REASONS

Community Loan Servicing, L.L.C.1 and David Ertel2 move to dismiss

plaintiff’s complaint under Federal Rule of Procedure 12(b). Plaintiff does

not oppose the motions. Because the Court lacks personal jurisdiction over

Ertel, and because plaintiff’s claims against Community are precluded by res

judicata, the Court grants defendants’ motions to dismiss.

I. BACKGROUND

This case involves a mortgage dispute. Plaintiff Lewis Giles, Jr. alleges

that defendant Bayview Loan Servicing, L.L.C.3 holds a “promissory note and

1 R. Doc. 15.

2 R. Doc. 16.

3 Bayview Loan Servicing, L.L.C. changed its name to Community Loan

Servicing, L.L.C. on September 28, 2020. R. Doc. 22 at 1; R. Doc. 22-1 at 1.

The Court granted Community’s request to be substituted as a party on

September 30, 2020. R. Doc. 23.

mortgage” over his property.4 Plaintiff states that, in November 2019,

Bayview refused to accept a payment on his loan because it was in default.5

Plaintiff claims that he asked Bayview’s representative what amount he

needed to pay to “get the loan current,” but the representative told him that

she would “have to get that amount from the foreclosing attorney.”6 Plaintiff

claims that he was entitled to this information under the terms of the

mortgage, but he never received it.7 He also alleges that the representative

lied, as there was never an attorney assigned to his case.8

Giles alleges that, to avoid foreclosure, he submitted two loan

modification applications.9 Bayview allegedly denied these applications

because of a “default on a previous loan modification.”10 But, plaintiff asserts

that he had not solicited, approved, or accepted a previous loan

modification.11 He claims that these statements by Bayview show that it

modified the mortgage agreement without his consent.12

4 R. Doc. 1-2 at 1.

5 Id. at 3.

6 Id. at 3.

7 Id.

8 Id. at 5.

9 Id. at 4.

10 Id.

11 Id.

12 Id. at 4-5.

Plaintiff alleges that the attempted foreclosure was “wrongful,” as it

was preceded by a breach of the mortgage contract.13 He claims that

breaches occurred when defendants (1) failed to provide him with the

requested information about the amount he had to pay to avoid foreclosure;14

(2) modified the loan contract without his consent;15 and (3) lied about

whether an attorney was reviewing his account.16 He also alleges that David

Ertel, Bayview’s directing manager, “malicious[ly]” directed Bayview’s

actions.17

This complaint comes after this Court dismissed plaintiff’s complaint

in a separate case, see Giles v. Bayview Loan Serv., No. 20-1128, 2020 WL

3545384 (E.D. La. June 30, 2020) (“Giles I”), involving the same mortgage

dispute.18 Bayview, now doing business as Community, and Ertel move to

dismiss plaintiff’s second complaint.

13 Id. at 1.

14 Id. at 3.

15 Id. at 4.

16 Id. at 4-6.

17 Id. at 6-7.

18 R. Doc. 33 (Case No. 20-1128).

II. LEGAL STANDARD

A. Rule 12(b)(2)

Personal jurisdiction is “an essential element of the jurisdiction of a

district court, without which the court is powerless to proceed to an

adjudication.” Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999)

(internal quotation marks and citation omitted). A district court may

exercise personal jurisdiction over a defendant if “(1) the long-arm statute of

the forum state creates personal jurisdiction over the defendant; and (2) the

exercise of personal jurisdiction is consistent with the due process

guarantees of the United States Constitution.” Revell v. Lidov, 317 F.3d 467,

469 (5th Cir. 2002). Because Louisiana’s long-arm statute, La. Rev. Stat.

§ 13:3201, extends jurisdiction to the limits of due process, the Court need

only consider whether the exercise of jurisdiction in this case satisfies federal

due process requirements. Dickson Mar. Inc. v. Panalpina, Inc., 179 F.3d

331, 336 (5th Cir. 1999).

Personal jurisdiction may be either general or specific. Seiferth v.

Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006). General

jurisdiction over a foreign defendant exists if the defendant’s “affiliations

with the State are so ‘continuous and systematic’ as to render them

essentially at home in the forum State.” Goodyear Dunlop Tires Operations,

S.A. v. Brown, 564 U.S. 915, 919 (2011). The Fifth Circuit has articulated a

three-step inquiry to determine whether specific jurisdiction exists. Seiferth,

472 F.3d at 271. First, the plaintiff must show that “the defendant has

minimum contacts with the forum state, i.e., . . . it purposely directed its

activities toward the forum state or purposefully availed itself of the

privileges of conducting activities there.” Id. Second, the plaintiff must show

that his “cause of action arises out of or results from the defendant’s forum-

related contacts.” Id. If the plaintiff makes these showings, “the burden

shifts to the defendant to defeat jurisdiction by showing that its exercise

would be unfair or unreasonable.” Id.

When the district court rules on a motion to dismiss for lack of personal

jurisdiction without an evidentiary hearing, the “uncontroverted allegations

in the plaintiff’s complaint must be taken as true, and conflicts between the

facts contained in the parties’ affidavits must be resolved in the plaintiff’s

favor.” Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602, 609 (5th Cir.

2008). But the district court is not required “to credit conclusory allegations,

even if uncontroverted.” Panda Brandywine Corp. v. Potomac Elec. Power

Co., 253 F.3d 865, 869 (5th Cir. 2001).

B. Rule 12(b)(6)

When considering a motion to dismiss under Rule 12(b)(6), the Court

accepts all well-pleaded facts as true and views the facts in the light most

favorable to the plaintiff. See Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.

1996). The Court must resolve doubts as to the sufficiency of the claim in the

plaintiff’s favor. Vulcan Materials Co. v. City of Tehuacana, 238 F.3d 382,

387 (5th Cir. 2001).

But to survive a Rule 12(b)(6) motion, a party must plead “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) (quoting Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 570 (2007)). Courts must dismiss the claim if

there are insufficient factual allegations to raise the right to relief above the

speculative level, Twombly, 550 U.S. at 555, or if it is apparent from the face

of the complaint that there is an insuperable bar to relief, Jones v. Bock, 549

U.S. 199, 215 (2007). The Court is not bound to accept as true legal

conclusions couched as factual allegations. Iqbal, 556 U.S. at 679.

On a Rule 12(b)(6) motion, the Court must limit its review to the

contents of the pleadings, including attachments. Brand Coupon Network,

L.L.C. v. Catalina Mktg. Corp., 748 F.3d 631, 635 (5th Cir. 2014). The Court

may also consider documents attached to a motion to dismiss or an

opposition to that motion when the documents are referred to in the

pleadings and are central to a plaintiff's claims. Id. “In addition to facts

alleged in the pleadings, however, the district court ‘may also consider

matters of which [it] may take judicial notice.’” Hall v. Hodgkins, 305 F.

App'x 224, 227 (5th Cir. 2008) (citing Lovelace v. Software Spectrum, Inc.,

78 F.3d 1015, 1017-18 (5th Cir. 1996)).

Finally, courts construe briefs submitted by pro se litigants liberally,

and a court will “apply less stringent standards to parties proceeding pro se

than to parties represented by counsel.” Grant v. Cuellar, 59 F.3d 523, 524

(5th Cir. 1995). This does not mean, however, that a court “will invent, out

of whole cloth, novel arguments on behalf of a pro se plaintiff in the absence

of meaningful, albeit imperfect, briefing.” Jones v. Alfred, 353 F. App’x 949,

951-52 (5th Cir. 2009).

III. DISCUSSION

A. Personal Jurisdiction

As noted, plaintiff has not opposed Ertel’s motion to dismiss for lack of

personal jurisdiction. The Fifth Circuit has not explicitly addressed how

district courts should consider unopposed motions to dismiss for lack of

personal jurisdiction. State Farm Fire & Cas. Co. v. Diva Limousine, Ltd.,

No. 13-6656, 2014 WL 4450427, at *4 (E.D. La. Sept. 10, 2014). District

courts in the Fifth Circuit have resolved unopposed motions to dismiss for

lack of personal jurisdiction by asking whether the plaintiff’s complaint

alleges a prima facie case of personal jurisdiction. See id. (collecting cases).

Giles’ complaint does not allege a prima facie case of personal

jurisdiction. To establish general jurisdiction, plaintiff must show

“continuous and systematic” contacts such that Ertel is “essentially at home

in the forum State.” Goodyear Dunlop Tires Operations, S.A., 564 U.S. at

919. Plaintiff has not alleged such contacts. See Johnston v. Multidata Sys.

Int’l Corp., 523 F.3d 602, 610 (5th Cir. 2008) (“[V]ague and overgeneralized

assertions that give no indication as to the extent, duration, or frequency of

contacts are insufficient to support general jurisdiction.”). Indeed, the only

transaction at issue in the complaint is plaintiff’s mortgage with Bayview to

which Ertel was not a party. Further, plaintiff’s allegations do not establish

a prima facie case of specific jurisdiction. Plaintiff alleges that Ertel is the

“directing manager” of Bayview.19 But, under the fiduciary-shield doctrine,

a corporate officer is not personally liable for the actions of his company.

Stuart v. Spademan, 772 F.2d 1185, 1197 (5th Cir. 1985) (“[T]he fiduciary-

19 R. Doc. 1-2 at 6.

shield doctrine . . . holds that an individual’s transaction of business within

the state solely as a corporate officer does not create personal jurisdiction

over that individual though the state has in personam jurisdiction over the

corporation.”).

There are two exceptions to the fiduciary-shield doctrine, but plaintiff

has not alleged facts to satisfy either. First, he has not alleged facts showing

that Ertel is Bayview’s “alter ego.” See id. (stating that the fiduciary-shield

doctrine “does not apply when courts are willing to disregard the corporate

entity, usually on the theory that the individual . . . is the alter ego of the

corporation.”). Second, he has not alleged facts that would establish Ertel’s

personal liability.20 See id. (stating that “individual officers . . . would be

personally liable to any third person they injured by virtue of their tortious

activity”). Although plaintiff asserts with no specific factual basis that Ertel

directed all of Bayview’s actions, the Court need not credit this conclusory

statement. Panda Brandywine Corp., 253 F.3d at 869 (“[T]he prima-facie-

case requirement does not require the court to credit conclusory allegations,

even if uncontroverted.”); see also Far West Capital, Inc. v. Towne, 46 F.3d

1071, 1079 (10th Cir. 1995) (“[T]he mere allegation that an out-of-state

defendant has tortiously interfered with contractual rights or has committed

20 Id.

other business torts that have allegedly injured a forum resident does not

necessarily establish that the defendant possesses the constitutionally

required minimum contacts.”). In fact, the documents plaintiff attaches to

his complaint to demonstrate his course of dealing with Bayview do not even

mention Ertel’s name.

The Court finds that plaintiff’s complaint does not allege a prima facie

case of personal jurisdiction. Consequently, the Court lacks personal

jurisdiction over Ertel. When a court lacks personal jurisdiction over a

defendant, it must dismiss the defendant without prejudice. See Guidry v.

U.S. Tobacco Co., 188 F.3d 619, 623 n.2 (5th Cir. 1999).21 The Court

dismisses Ertel without prejudice for lack of personal jurisdiction.

B. Failure to State a Claim

Defendant Community argues that plaintiff’s claims are precluded by

res judicata.22 In general, res judicata is an affirmative defense that should

be addressed at summary judgment or trial, not in a 12(b)(6) motion.

American Realty Trust, Inc. v. Hamilton Lane Advisors, Inc., 115 F. App’x

662, 664 n.1 (5th Cir. 2004). Nevertheless, “[i]f based on the facts pleaded

and judicially noticed, a successful affirmative defense appears, then

21

22 R. Doc. 15.

dismissal under Rule 12(b)(6) is proper.” Hall, 305 F. App’x at 227-28 & n.1.

Thus, as long as the Court considers only the pleaded and judicially noticed

facts that are not “outside the pleadings,” an affirmative defense may serve

as the “proper basis” for a motion to dismiss. Id. at 228 n.1 (citing Fed. R.

Civ. P. 12(d)).

The Court takes judicial notice of plaintiff’s previous action in Giles I.

See Fed. R. Evid. 201(c)-(d); see also Hall, 305 F. App’x at 226-27, 229

(affirming Rule 12(b)(6) dismissal for res judicata where the district court

took judicial notice of the plaintiff’s prior actions). This Court dismissed the

complaint in Giles I on a motion to dismiss for failure to state a claim under

Rule 12(b)(6). See 2020 WL 3545384, at *1.

In the Fifth Circuit, res judicata, or claim preclusion, “forecloses

relitigation of claims that were or could have been advanced in support of the

cause of action on the occasion of its former adjudication.” Davis v. Dallas

Area Rapid Transit, 383 F.3d 309, 312-13 (5th Cir. 2004) (citing Allen v.

McCurry, 449 U.S. 90, 94 (1980)). The Court applies a four-part test to

determine if a claim is precluded: “(1) the parties in both the prior suit and

current suit must be identical; (2) a court of competent jurisdiction must

have rendered the prior judgment; (3) the prior judgment must have been

final and on the merits; and (4) the plaintiff must raise the same cause of

action in both suits.” Id. at 313 (citation omitted). These elements are

satisfied here.

First, plaintiff sued the same defendants in Giles I as he did in this

action, including Bayview Loan Servicing, L.L.C., which changed its name to

Community Loan Servicing, L.L.C., now substituted as a defendant in this

action.23 Second, this Court was a court of competent jurisdiction. See Giles

I, 2020 WL 3545384, at *1. Third, in Giles I, the Court dismissed the claims

against all defendants with prejudice for failure to state a claim—a final

judgment on the merits. Id. at *3; see Fed. R. Civ. P. 41(b); Eaves v. Doniger,

277 F.3d 1372 (5th Cir. 2001). The first three requirements of claim

preclusion are satisfied.

As to the fourth factor—whether plaintiff raised the same cause of

action in the earlier suit—the Court asks “whether the two actions are based

on the same ‘nucleus of operative facts.’” Davis, 383 F.3d at 313 (citations

omitted). It is the “nucleus of operative facts” in the first action, rather than

the “facts litigated,” or the “type of relief requested, substantive theories

advanced, or types of rights asserted, [that] defines the claim.” United States

v. Davenport, 484 F.3d 321, 326-27 (5th Cir. 2007) (citation omitted). The

determination is a practical weighing of various factors, including “whether

23 R. Doc. 22; R. Doc. 23.

the facts are related in time, space, origin, or motivation, whether they form

a convenient trial unit, and whether their treatment as a unit conforms to the

parties’ expectations or business understanding or usage.” Davis, 383 F.3d

at 313 (citations omitted). Furthermore, “[i]f the cases are based on the same

nucleus of operative facts, the first judgment’s preclusive effect extends to all

rights the original plaintiff had ‘with respect to all or any part of the

transaction, or series of connected transactions, out of which the [original]

action arose.’” Davenport, 484 F.3d at 326 (quoting Petro-Hunt, L.L.C. v.

United States, 365 F.3d 385, 395 (5th Cir. 2004)).

The operative facts here and in Giles I are identical. In both

complaints, plaintiff’s theory is that Community/Bayview allegedly breached

the mortgage contract by failing to provide plaintiff with a quote for the

amount needed to bring his loan out of default24 and by modifying his

mortgage agreement without his knowledge or consent.25 Plaintiff alleges

that the attempted foreclosure was “wrongful” due to the breach.26 All rights

that plaintiff had arising from these facts are precluded by the judgment in

Giles I. That plaintiff advances new legal theories under the FDCPA and

RESPA does not change this result. See Davenport, 484 F.3d at 326-27.

24 Compare R. Doc. 1-2 at 3 with R. Doc. 33 at 2 (Case No. 20-1128).

25 Compare R. Doc. 1-2 at 4 with R. Doc. 33 at 2 (Case No. 20-1128).

26 R. Doc. 1-2 at 2; R. Doc. 33 at 2 (Case No. 20-1128).

Accordingly, the Court finds that plaintiff brings the same cause of action

here as in Giles I. The Court must dismiss plaintiffs complaint on the

grounds of res judicata.

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS defendant Community’s

motion to dismiss for failure to state a claim. Plaintiffs claims against

Community are DISMISSED WITH PREJUDICE. The Court also GRANTS

defendant Ertel’s motion to dismiss for lack of personal jurisdiction.

Plaintiffs claims against Ertel are DISMISSED WITHOUT PREJUDICE.

New Orleans, Louisiana, this 4th _ day of November, 2020.

; SARAH S. VANCE

UNITED STATES DISTRICT JUDGE

14