United States District Court, M.D. Tennessee, Nashville
January 23, 2015
BETTY JO GOODMAN, Plaintiff
NATIONSTAR MORTGAGE, LLC; SHAPIRO & KIRSCH, LLP, Defendants
Betty Jo Goodman, Plaintiff, Pro se, Nashville, TN.
For Nationstar Mortgage, LLC, Defendant: Phillip P. Welty, LEAD ATTORNEY, Gullett, Sanford, Robinson & Martin, Nashville, TN.
For Shapiro & Kirsch, LLP, Defendant: Bonnie Baggott Culp, LEAD ATTORNEY, Shapiro & Kirsch, LLP, Memphis, TN.
JOE B. BROWN, United States Magistrate Judge. HONORABLE WILLIAM J. HAYNES, JR.
REPORT AND RECOMMENDATION
JOE B. BROWN, United States Magistrate Judge.
For the reasons stated below, the Magistrate Judge recommends that the Plaintiff's notice to the Clerk to show cause why an order claiming default judgment should not be entered for the Plaintiff, be DENIED and that the Defendants' motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) be GRANTED, and that this case be dismissed with prejudice.
The Plaintiff filed an earlier complaint in forma pauperis ( Goodman v. Nationstar Mortgage, LLC, No. 3:13 1377, 2014 WL 1385861, at *1 (M.D. Tenn. Apr. 9, 2014) report and recommendation adopted, No. 3:13 CV 1377, 2014 WL 2739329 (M.D. Tenn. June 17, 2014)). Magistrate Judge Griffin made an initial review of the complaint and recommended that the case be dismissed for failure to state a claim upon which relief could be granted. Goodman, No. 3:13 1377, 2014 WL 1385861, at *5. After allowing the Plaintiff to file a delayed objection to Magistrate Judge Griffin's report and recommendation on June 17, 2014, Judge Trauger reviewed the matter de novo. Goodman, No. 3:13 1377, 2014 WL 2739329, at *1. She accepted the report and recommendation in its entirety and made the findings of fact and conclusions of law her decision, thereby dismissing the case for failure to state a claim upon which relief can be granted. Goodman, No. 3:13 1377, 2014 WL 2739329, at *2. Judge Trauger further found that any appeal of the matter would not be taken in good faith. Goodman, No. 3:13 1377, 2014 WL 2739329, at *2. No appeal was taken from this order. (Docket Entry 6-3).
The present complaint is word-for-word from the original complaint with the exception that in the present complaint, the Plaintiff has left out claims of an invasion of privacy, negligent, wanton and/or intentional hiring and supervision of incompetent employees or agents. (Docket Entry 1).
In the present complaint, the Plaintiff paid the $400 filing fee and attempted service of process (Docket Entry 1). In her subsequent notice to the Clerk to show cause why an order granting default judgment should not be entered (Docket Entry 3), the Plaintiff provided documents to attempt to show she had mailed a copy of the complaint and summons to Defendant Nationstar Mortgage, LLC (Nationstar) and Defendants Shapiro & Kirsch, LLP (Shapiro).
The notice contended that on November 6, 2014, Nationstar received a copy of the complaint and that on December 15, 2014, a copy of the complaint had not been delivered to Defendant Shapiro, and that as of December 14, 2014, there had been no response to the complaint by either Defendant. The Plaintiff did not return an actual copy of the summons showing service of process.
A default judgment in federal court is a two step process. The Plaintiff must first move and secure a default against a defendant and after securing default then move for a default judgment. In order to obtain a default, the Plaintiff must show that service of process was accompanied in accordance with Federal Rules of Civil Procedure 4. In this case, the Plaintiff's own pleadings show that she did not accomplish service of process on Defendant Shapiro. The Plaintiff has failed to return the second page of the summons which shows actual service of process was accomplished for Nationstar. She has shown that certified mail was delivered to an address she chose.
As the Defendants point out in their response to this notice (Docket Entry 5), the Plaintiff did not use the registered agent in Tennessee for either of the Defendants. The correct address for the agent for Nationstar is in Dallas, Texas. The summons sent by the Plaintiff to Nationstar was addressed to Lewisville, Texas. The Magistrate Judge believes that the Defendants are correct that the Plaintiff did not serve either Defendant and therefore is not entitled to either a default or a default judgment.
Even if somehow the Plaintiff's service was considered proper, the Defendants have now responded by filing a joint motion to dismiss for failure to state a claim under Federal Rules of Civil Procedure 12(b)(6) (Docket Entry 6). Even if this pleading was filed beyond the time period permitted by law, the Plaintiff is not entitled to a default. The Defendant is now represented by counsel and defending the case. Absent a showing of prejudice, which was not pled by the Plaintiff and is not found by the Magistrate Judge, default should not be entered. Default is not to be granted lightly. " Judgment by default is a drastic step which should be resorted to only in the most extreme cases." United Coin Meter Co., Inc. v. Seaboard Coastline RR. 705 F.2d 839, 845 (6th Cir. 1983).
The Magistrate Judge has considered the motion for failure to state a claim (Docket Entry 3)and the Plaintiff's response (Docket Entry 7). The Magistrate Judge believes that the case law in this matter is quite clear. The Plaintiff's contention in paragraph 3 that her earlier case (3:13-1377) was dismissed without prejudice is incorrect. Judge Trauger dismissed the case for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Federal Rule of Civil Procedure 41(b) provides:
Unless the dismissal states otherwise, a dismissal under this subdivision (b) and any dismissal not under this rule-except one for a lack of jurisdiction, improper venue, or failure to join a party under Rule 19-operates as an adjudication on the merits.
The Sixth Circuit has spoken quite clearly on this point. In Bartsch v. Chamberlin Company of America, the court held that where an earlier case is dismissed not for lack of jurisdiction or improper venue and did not specify that it was not upon the merits, Rule 41(b) operates as an adjudication upon the merits. Bartsch v. Chamberlin Co. of Am., 266 F.2d 357, 358 (6th Cir. 1959). Dismissal of the earlier case, even though it does not specifically use the words " with prejudice, " nevertheless under Rule 41(b) operates as a decision on the merits and bars this action. See also Dyer v. Intera Corp., 870 F.2d 1063, 1067 (6th Cir. 1988).
All matters alleged in the present complaint were resolved against the Plaintiff by Judge Trauger's earlier decision, and therefore the doctrine of res judicata or claims preclusion applies and this matter must be dismissed. The Plaintiff had an opportunity to appeal the dismissal or her identical claims in her earlier case, and she failed to avail herself of her right of appeal. It is now too late to attempt to take a second bite at this apple. See Montana v. United States, 440 U.S. 147, 153-54, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979); and Sanders Confectionary Products, Inc. v. Heller Financial, Inc., 973 F.2d 474, 480 (6th Cir. 1992).
In their motion, the Defendants point out that the Plaintiff's mortgage account was due in June 2010, and that they have cancelled several foreclosure sales due to the Plaintiff's filing Chapter 13 petitions in Bankruptcy Court, through earlier litigation in this court as well as litigation in Maury County Chancery Court. They point out that both of the Chapter 13 bankruptcies were dismissed for Plaintiff's failure to appear in the hearings (Docket Entry 6, fn. 1). They further point out the Plaintiff obtained an order in Chancery Court that restrained the Defendant from conducting a foreclosure sale until such time as the District Court in the Middle District of Tennessee resolved this matter. A hearing to resolve this restraining order was set for January 16, 2015.
The filing of this case, which is clearly barred by res judicata and the Chapter 13 filings which were dismissed for failure to prosecute, raises the possibility that the Plaintiff is acting in bad faith in this matter. Any party who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct. 28 U.S.C. § 1927.
In the Magistrate Judge's opinion, the Plaintiff is perilously close to incurring that sanction in this latest filing.
The pro se Plaintiff is entitled to considerable latitude in her pleadings. However, this last filing certainly presses that limit.
For the reasons stated above, the Magistrate Judge recommends that the Plaintiff's notice to the Clerk to show cause why an order claiming default judgment should not be entered for the Plaintiff, be DENIED and that the Defendants' motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) be GRANTED, and that this case be DISMISSED with prejudice.
Under Rule 72(b) of the Federal Rules of Civil Procedure, any party has 14 days from receipt of this Report and Recommendation in which to file any written objections to this Recommendation with the District Court. Any party opposing said objections shall have 14 days from receipt of any objections filed in this Report in which to file any responses to said objections. Failure to file specific objections within 14 days of receipt of this Report and Recommendation can constitute a waiver of further appeal of this Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140, 155, 106 S.Ct. 466, 88 L.Ed.2d 435 reh'g denied, 474 U.S. 1111, 106 S.Ct. 899, 88 L.Ed.2d 933 (1986).