# Giles v. Community Loan Servicing, LLC

> District Court, E.D. Louisiana · November 4, 2020

URL: https://www.frixlaw.com/law-library/cases/10186079

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** November 4, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10186079

## How later opinions describe it (automated extraction)

- affirming Rule 12(b)(6) dismissal for res judicata where the district court took judicial notice of the plaintiff’s prior actions
- stating that “individual officers . . . would be personally liable to any third person they injured by virtue of their tortious activity”
- 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.”

## Opinion text

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10186079. Public record. Not legal advice.