U.S. Bank Ntl Assn v. Blizzard ( 2021 )

Case: 20-50051 Document: 00516011632 Page: 1 Date Filed: 09/13/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
September 13, 2021
No. 20-50051 Lyle W. Cayce
Summary Calendar Clerk
U.S. Bank National Association,
as Legal Title Trustee for Truman 2016 SC6 Title Trust,
Plaintiff—Appellee,
versus
Gloria Blizzard,
Defendant—Appellant.
Appeal from the United States District Court
for the Western District of Texas
No. 1:18-CV-360
Before Smith, Higginson, and Willett, Circuit Judges.
Per Curiam:*
Gloria Blizzard moves to appeal in forma pauperis (“IFP”) from a
judgment dismissing her counterclaims under Federal Rule of Civil Proce-
dure 12(b)(6) and granting summary judgment on the foreclosure claims of
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this opin-
ion should not be published and is not precedent except under the limited circumstances
set forth in 5th Circuit Rule 47.5.4.
Case: 20-50051 Document: 00516011632 Page: 2 Date Filed: 09/13/2021
No. 20-50051
U.S. Bank National Association (U.S. Bank) under Federal Rule of Civil Pro-
cedure 56(a). The district court construed Blizzard’s initial federal pleading
as a removal petition based on diversity jurisdiction under 28 U.S.C. § 1332rather than as a federal civil action under the Racketeer Influenced and Cor-
rupt Organizations Act (“RICO”); 18 U.S.C. § 1964(c).
Both parties contend that we should construe the action as an original
federal action. U.S. Bank asserts there is no federal diversity jurisdiction if
the action is deemed a removal because Blizzard, a Texas resident, could not
properly remove the action from Texas state court under 28 U.S.C.
§ 1441(b)(2). But § 1441(b)(2) is a waivable procedural requirement, not a
rule of subject-matter jurisdiction. See Adam v. Berry (In re 1994 Exxon Chem.
Fire), 558 F.3d 378, 392−93 (5th Cir. 2009). Because U.S. Bank did not move
to remand and invoke § 1441(b)(2), and because § 1332’s other requirements
are met, the district court had jurisdiction. See Moss v. Princip, 913 F.3d 508,
514 n.10 (5th Cir. 2019).
There is some question about Blizzard’s financial eligibility to proceed
IFP. But we do not address that issue, because she fails to identify any non-
frivolous issue for appeal. See McGarrah v. Alford, 783 F.3d 584, 584 (5th Cir.
2015); Carson v. Polley, 689 F.2d 562, 586 (5th Cir. 1982).
Blizzard contends that the district court wrongly realigned the parties
to make her the defendant rather than a plaintiff, thereby preventing her from
developing her RICO claim. Given Blizzard's enigmatic initial pleading, the
court did not abuse its discretion by realigning the parties to conform to the
state action. See Lloyd v. Pendleton Land & Expl., Inc., 22 F.3d 623, 625 (5th
Cir. 1994). Further, the realignment did not prevent Blizzard from raising
any issue or asserting a RICO counterclaim.
The district court correctly found that Blizzard’s conclusional asser-
tions failed to state a plausible RICO counterclaim. See Ashcroft v. Iqbal,
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556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007). Neither the realignment nor the dismissal of the RICO counter-
claims provides a nonfrivolous issue for appeal.
Although the district court did not explicitly apply claim preclusion
(res judicata) or issue preclusion (collateral estoppel), and U.S. Bank did not
plead any preclusion doctrine, this court “may raise the issue of res judicata
sua sponte as a means to affirm the district court decision.” Russell v. Sun-
America Sec., Inc., 962 F.2d 1169, 1172 (5th Cir. 1992) (internal quotation
marks and citation omitted); see United Home Rentals, Inc. v. Tex. Real Estate
Comm’n, 716 F.2d 324, 330 (5th Cir. 1983); Am. Furniture Co. v. Int’l Accom-
modations Supply, 721 F.2d 478, 482 (5th Cir. Unit A Mar. 1981). Issue pre-
clusion or collateral estoppel provides that “if a litigant has fully and fairly
litigated an issue and lost, then third parties unrelated to the original action
can bar the litigant from re-litigating that same issue in a subsequent suit.”
United States v. Mollier, 853 F.2d 1169, 1175 n.7 (5th Cir. 1988); see United
States v. Shanbaum, 10 F.3d 305, 311 (5th Cir. 1994).
In a foreclosure action in the Western District of Texas, Wilmington
Trust, National Association (“Wilmington”), obtained a judgment allowing
foreclosure on Blizzard's property. Wilmington assigned the foreclosure
rights to U.S. Bank while the case was on appeal; we affirmed. See Wilming-
ton Trust, N.A. v. Blizzard, 702 F. App’x 214, 215-18 (5th Cir. 2017). Conse-
quently, Blizzard is precluded by collateral estoppel from relitigating any
issue that was “identical to the one involved in the prior litigation,” that was
“actually litigated in the prior” action, and that was “a critical and necessary
part of the judgment in that earlier action.” Rabo Agrifinance, Inc. v. Terra
XXI, Ltd., 583 F.3d 348, 353 (5th Cir. 2009). Blizzard is precluded from
relitigating her contentions that she is not liable for the mortgage debt, that
there were defects in the assignment of the foreclosure rights to Wilmington,
and that foreclosure is otherwise not warranted.
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Although Blizzard is not necessarily precluded by the Wilmington
judgment from challenging the transfer from Wilmington to U.S. Bank, she
has no right, under Texas mortgage law, to attack the validity of any assign-
ment of the note because there is no assertion that any assignment was void
ab initio. See Morlock, L.L.C. v. Bank of New York, 448 S.W.3d 514, 517, 520-
21 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) (citing Reinagel v.
Deutsche Bank Nat. Tr. Co., 735 F.3d 220, 225–26 (5th Cir. 2013)); see also
Bynane v. Bank of New York Mellon for CWMBS, Inc. Asset-Backed Certificates
Series 2006-24, 866 F.3d 351, 360 (5th Cir. 2017); Ferguson v. Bank of New
York Mellon Corp., 802 F.3d 777, 782 (5th Cir. 2015).
Moreover, Blizzard has offered only vague, conclusional, and irrele-
vant assertions of fraud and other presumptions and suspicions of ill-defined
irregularities that are inadequate to state any plausible claim or show a genu-
inely contested issue of fact that is material to the conclusion that the defen-
dants are entitled to judgment as a matter of law. See Fed. R. Civ. P. 9(b)
(requiring a party to “state with particularity the circumstances constituting
fraud”); Fed. R. Civ. P. 12(b); Fed. R. Civ. P. 56(a); Twombly,
550 U.S. at 555; HSBC Bank USA, N.A. as Tr. for Merrill Lynch Mortg. Loan
v. Crum, 907 F.3d 199, 202 (5th Cir. 2018) (noting the inadequacy of conclu-
sional assertions); Morrison v. City of Baton Rouge, 761 F.2d 242, 244 (5th Cir.
1985) (holding that conclusional assertions, without reference to specific
facts or evidence, are insufficient to state a claim of a conspiracy).
Because Blizzard shows no nonfrivolous issue for appeal, her IFP
motion is denied, and her appeal is dismissed as frivolous. See McGarrah,
783 F.3d at 584; 5th Cir. R. 42.2. Blizzard is warned that frivolous actions
or appeals will invite sanctions, including monetary sanctions and limits on
her access to this court and any court subject to this court's jurisdiction.
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