United States District Court, D. South Dakota, Western Division
LAYNE A. LINDBERG, BARBARA J. LINDBERG, Plaintiffs,
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.
JEFFREY L. VIKEN, CHIEF JUDGE.
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).
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. (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. (Docket 48).
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.
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).
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.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.
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.
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.Id. Only the first page
of the letter is in the record. Id.
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.
Plaintiffs' Objection & Motion to Amend
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.
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