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Lindberg v. Dimon

United States District Court, D. South Dakota, Western Division

March 27, 2019

MR. JAMES DIMON, Chairman and Executive Officer JP Morgan Chase Bank, National Association; ATTORNEY DAVID C. PIPER #4128, Mackoff Kellogg Law Firm; MR. ANDREW J. CECERE, President and Director U.S. Bank National Association; MR. JAY BRAY, President, Chief Executive Officer & Chairman Nationstar Mortgage LLC, d/b/a Mr. Cooper; JPMORGAN CHASE BANK NATIONAL; U.S. BANK NATIONAL ASSOCIATION; and NATIONSTAR MORTGAGE LLC d/b/a MR. COOPER, Defendants.




         This case arose from a real estate transaction. Plaintiffs Layne and Barbara Lindberg leased a house in foreclosure proceedings in Rapid City, South Dakota, from Lyle DuVall. Plaintiffs unsuccessfully attempted to negotiate a short sale with DuVall and defendant JP Morgan Chase Bank, N.A. (“JP Morgan”). JP Morgan foreclosed on the home and assigned the judgment of foreclosure to defendant Nationstar Mortgage, LLC (“Nationstar”), which then assigned it to defendant U.S. Bank, N.A. (“U.S. Bank”). Plaintiffs, appearing pro se, brought this suit against the bank defendants and their chief executive officers, James Dimon, Jay Bray, and Andrew Cecere, alleging breach of contract and various torts. Plaintiffs also named David Piper, JP Morgan's local counsel, as a defendant. Now pending before the court are defendants' seven motions to dismiss plaintiffs' original and first amended complaint, along with defendant Piper's motion to strike plaintiffs' first amended complaint. (Dockets 9, 12, 13, 18, 25, 26, 30 & 34).

         The court referred the pending motions to Magistrate Judge Veronica L. Duffy pursuant to the court's standing order of October 16, 2014, and 28 U.S.C. § 636(b)(1) for a report and recommendation (“R&R”). (Docket 40). The magistrate judge issued an R&R concluding defendant Piper's motion to strike the first amended complaint should be denied but the motions to dismiss should all be granted. (Docket 41). Plaintiffs timely objected to the R&R and the bank defendants filed responses to the objections.[1] (Dockets 42, 43 & 44). In their objections, plaintiffs ask the court to permit them to again amend their complaint. (Docket 42 at p. 15). Plaintiffs further filed a response to defendants' responses.[2] (Docket 48).

         Under the Federal Magistrate Act, 28 U.S.C. § 636(b)(1), if a party files written objections to the magistrate judge's proposed findings and recommendations, the district court is required to “make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” Id. The court may “accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” Id. For the reasons given below, the court denies defendant Piper's motion to strike the first amended complaint and grants each of the pending motions to dismiss. The court further denies plaintiffs' motion to again amend their complaint. The court adopts the R&R in full.


         I. Facts

         The plaintiffs did not object to the magistrate judge's factual findings. The court adopts those findings in full. (Docket 41 at pp. 2-11). Here, the court need only set forth facts applicable to the plaintiffs' sole legal objection-whether the magistrate judge erred in concluding no contract existed between plaintiffs and any defendant. Because this matter is at the motion to dismiss stage, the court takes plaintiffs' “well-pleaded factual allegations” as true but does not give their legal conclusions “the assumption of truth.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).

         Plaintiffs leased the Rapid City house in April of 2012 from DuVall for $2, 000 per month in rent. (Docket 22 at ¶¶ 9-10). Plaintiffs also agreed to purchase the property for $305, 000, subject to JP Morgan's approval. Id. Plaintiffs then offered to purchase the property as a short sale for $403, 000.[3]Id. at ¶ 13. In their objections to the R&R, plaintiffs state they signed a contract with DuVall on May 14, 2012, to purchase the property for $403, 000 “contingent on approval of short sale from JP Morgan.” (Docket 42 at p. 3). Plaintiffs secured the contract with $1, 000 in earnest money, deposited with Pennington Title Company. Id. This contract is not in the record.[4]

         JP Morgan refused plaintiffs' $403, 000 short sale offer. (Docket 22 at ¶ 13). JP Morgan then offered to sell the property for $456, 487, plus the cost of repairs (which the plaintiffs estimate as more than $133, 000). Id. at ¶ 15. Plaintiffs found this offer “ridiculous, offensive and unacceptable.” Id. In their objections, plaintiffs state this offer was made on July 14, 2012. (Docket 42 at p. 3). Despite this, plaintiffs state “all parties signed” the offer and that it constituted an “original binding contract.” Id. at pp. 3-4. However, they also characterize the July 14 document as an amendment to the May 14 “original signed and accepted sales contract between all parties.” Id. at p. 4. The July 14 document is also not in the record.

         On February 11, 2013, JP Morgan sent a letter to DuVall stating it approved a short sale between him and plaintiffs. (Docket 28-2). The letter states JP Morgan will accept “a minimum of $403, 866.12 to release the . . . mortgage lien and waive any deficiency so you will owe nothing more on this mortgage.” Id. JP Morgan required “payment in certified funds on or before” March 4, 2013, or the offer would become “null and void.” Id. Also required was a “signed agreement of sale . . . received before the foreclosure sale date.” Id. The letter further stated the “acceptance is only for the contract sale price of $456, 000 between Layne A. Lindberg and Barbara J. Lindberg” and DuVall.[5]Id. Only the first page of the letter is in the record. Id.

         The magistrate judge noted plaintiffs never asserted they paid anything or gave a signed sale agreement to JP Morgan. (Docket 41 at p. 27). Plaintiffs do not make those assertions in their objections. Instead, they argue “the short sale could not be closed” because of DuVall's bankruptcy proceedings. (Docket 42 at p. 5). They nevertheless assert they have a contract with JP Morgan. Id. at pp. 3-4.

         II. Plaintiffs' Objection & Motion to Amend Complaint[6]

         Plaintiffs' sole “specific and” discernable objection to the R&R alleges the magistrate judge erred by determining they did not have a contract with JP Morgan. (Docket 42 at pp. 2-8). Plaintiffs contend their allegation a contract existed is a factual statement which must be taken as true. Id. at p. 7. They also ask the court to permit them to file a new amended complaint. Id. at p. 15.

         Plaintiffs notably do not “specifically” object to the magistrate judge's recommendations that their claims against the individual defendants be dismissed for lack of personal jurisdiction or that their tort claims be dismissed for failure to state a claim upon which relief can be granted. (Docket 42 at pp. 13-22, 30-41). The court adopts the magistrate judge's thorough reasoning on those points and accepts her recommendations. The court will only review the ...

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