Burke v. Ocwen Loan Servicing ( 2021 )

Case: 19-20267 Document: 00515802245 Page: 1 Date Filed: 03/30/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
March 30, 2021
No. 19-20267 Lyle W. Cayce
Clerk
Joanna Burke; John Burke,
Plaintiffs—Appellants,
versus
Ocwen Loan Servicing, L.L.C.,
Defendant—Appellee.
consolidated with
No. 20-20209
Joanna Burke; John Burke,
Plaintiffs—Appellants,
versus
Mark Daniel Hopkins; Shelley Hopkins; Hopkins Law,
P.L.L.C.,
Defendants—Appellees.
Case: 19-20267 Document: 00515802245 Page: 2 Date Filed: 03/30/2021
No. 19-20267
c/w No. 20-20209
Appeals from the United States District Court
for the Southern District of Texas
USDC Nos. 4:18-CV-4543 & 4:18-CV-4544
Before Owen, Chief Judge, and Davis and Dennis, Circuit Judges.
Per Curiam:*
These consolidated appeals stem from a mortgage foreclosure
dispute.1 Joanna Burke executed a home equity note (“the Note”) that was
secured by a Deed of Trust, see Deutsche Bank Nat’l Trust Co. v. Burke, 655
F. App’x 251, 252 (5th Cir. 2016) (Burke I). That instrument, which was also
signed by her husband, John Burke, encumbered the Burkes’s home in
Kingwood, Texas. After the Burkes repeatedly failed to make their loan
payments, this court held that the holder of the Note, Deutsche Bank
National Trust Company (“Deutsche Bank”), could proceed with
foreclosure, see Deutsche Bank Nat’l Trust Co. v. Burke, 902 F.3d 548, 552
(5th Cir. 2018) (per curiam) (Burke II). The Burkes now sue Deutsche
Bank’s mortgage servicer, Ocwen Loan Servicing LLC (“Ocwen”), and
Mark Hopkins and Shelley Hopkins, the Bank’s appellate counsel in Burke I
and II, and their law firm, Hopkins Law, P.L.L.C., (collectively, “the
Attorney Defendants”), alleging a variety of claims relating to the foreclosure
and to the conduct of the Defendants following Burke II. The district court
dismissed the claims against Ocwen on res judicata grounds and for want of
prosecution. The court also dismissed the claims against the Attorney
Defendants for failure to state a claim. We AFFIRM.
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
1
We consolidate case numbers 19-20267 and 20-20209.
2
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No. 19-20267
c/w No. 20-20209
I.
We have reviewed the facts pertinent to the foreclosure suit in Burke
I and II. To summarize, in May 2007, “Joanna Burke signed a Texas Home
Equity Note . . . promising to pay $615,000 plus interest to secure a loan.”
Id. at 550. The Note was secured by a Deed of Trust, signed by both Joanna
and John, placing a lien on their home. Id. In 2011, the Deed of Trust was
assigned to Deutsche Bank. Id. At the time of the assignment, the Burkes
had not made a mortgage payment in over a year. Id. Deutsche Bank’s loan
servicer at the time, OneWest Bank, accelerated the loan, but the couple
continued not to make their payments. Id. Deutsche Bank thus sought to
foreclose on the Burkes’s home, and, in 2018, we held that the bank had the
right to do so. Id.at 552.
Following our decision in Burke II, the Burkes sent correspondence to
Ocwen “disputing the validity of the current debt you claim we owe.” The
Burkes requested “all pertinent information regarding our loan.” Ocwen
responded through counsel. It noted that the Burkes appeared to be
“questioning the entire life of the loan” and that it was “impossible to
discern every concern” the Burkes may have. Nevertheless, Ocwen
furnished the Burkes with copies of the Note, the Deed of Trust, the
assignment of the Deed of Trust to Deutsche Bank, and the loan payment
history. Thereafter, in November 2018, the Burkes filed a pro se suit against
Ocwen in Texas state court. They brought claims for breach of contract,
breach of the duty of good faith and fair dealing, fraud, negligence, negligent
misrepresentation, unfair competition, and violations of the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”) (collectively,
the “Collection Claims”). The Burkes also alleged that Ocwen violated the
Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. (“RESPA”).
Ocwen removed the case to federal court and then moved to dismiss the
Burkes’ Collection Claims on res judicata grounds and to dismiss the RESPA
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c/w No. 20-20209
claim for failure to state a claim. Notably, the Burkes did not respond to
Ocwen’s motion but moved to remand the case to state court.
Ruling on the motions before it, the district court granted Ocwen’s
motion to dismiss the Collection Claims, concluding that the predicates for
application of res judicata were satisfied. Deutsche Bank, as the loan holder,
and Ocwen, as the loan servicer, were in privity for purposes of res judicata,
the court found. Further, the Collection Claims against Ocwen arose out of
the same nucleus of operative facts as the earlier litigation against Deutsche
Bank because both concern the loan and foreclosure on the Burkes’s home.
The court also concluded that the Burkes did not adequately plead a claim
under RESPA but granted the Burkes twenty-one days to address their
pleading deficiency. Failure to file an amended complaint within that time
period, the district court cautioned, would result in dismissal. The court also
denied the Burkes’s motion to remand. After more than twenty-one days
passed without the Burkes filing an amended pleading, the court invoked
Federal Rule of Civil Procedure 41(b) and dismissed the cause without
prejudice for want of prosecution. The Burkes filed a timely notice of appeal.
Contemporaneous with the filing of their suit against Ocwen, the
Burkes, proceeding pro se, sued the Attorney Defendants in Texas state court.
The Attorney Defendants removed the case to federal court, and the Burkes
filed a motion to remand, which the district court denied. 2 After the Burkes
filed an amended complaint, the Attorney Defendants moved to dismiss for
failure to state a claim. The Burkes then requested leave to file a second
amended complaint but did not attach an amended pleading or explain what
new facts or theories they would plead if granted leave. The magistrate judge
2
The same district court judge presided over both the actions against Ocwen and
the Attorney Defendants.
4
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c/w No. 20-20209
denied the Burkes’s motion. The magistrate conclude that, as best it could
discern from scouring the Burkes’s amended complaint, the Burkes claimed
that the Attorney Defendants’ conduct during the foreclosure litigation
constituted fraud, civil conspiracy, unjust enrichment, and violated the
Texas Debt Collection Act, Tex. Fin. Code § 392.001 et seq. (“TDCA”),
and the FDCPA. The magistrate judge issued a report recommending that
the district judge dismiss the Burkes’s complaint for failure to state a claim.
The district court adopted the magistrate’s report and dismissed the case
with prejudice. The Burkes timely appealed.
II.
We first consider the Burkes’s appeal of their action against Ocwen.
The Burkes argue that district court erred in denying their motion to remand
the case to state court. We review this ruling de novo. Scarlott v. Nissan N.
Amer., Inc., 771 F.3d 883, 887 (5th Cir. 2014). A motion to remand is properly
denied when federal jurisdiction exists and removal to federal court was
appropriate. See id. Removal of an action to federal court, in turn, is
appropriate when, inter alia, federal-question jurisdiction lies. See Caterpillar
Inc. v. Williams, 482 U.S. 386, 382 (1987). Jurisdiction on this basis “is
governed by the ‘well-pleaded complaint rule,’ which provides that federal
jurisdiction exists only when a federal question is presented on the face of the
plaintiff’s properly pleaded complaint.” Id. Here, the Burkes’s allege
violations of federal law in the very first paragraph of their complaint:
“Plaintiffs . . .[file] this . . .Complaint based on the fraudulent and injurious
acts of Defendant in violation of [sic] Section 1463 of the Dodd-Frank
Financial Reform Act, the Fair Debt Collection Practices Act, . . . 15 U.S.C[.]
1692, RESPA[,] 12 U.S.C. § 2605,” and other state law claims. Thus, federal
jurisdiction exists, and the district court correctly denied the Burkes’s
motion to remand. See Scarlott, 771 F.3d at 887.
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Next, the Burkes contend for the first time on appeal that res judicata
does not bar their Collection Claims against Ocwen. As mentioned, the
Burkes failed entirely to file any response to Ocwen’s motion to dismiss.
Although we recognize that the Burkes proceeded pro se in the district court
and we liberally construe the briefs of pro se litigants, the Burkes’s complete
lack of any opposition to Ocwen’s motion to dismiss on the basis of res
judicata in the district court forfeits their challenge on appeal to the court’s
granting of that motion. See Michael Ching-Lung Wang v. Formosa Plastics
Corp. Texas, 268 F. App’x 306, 308 (5th Cir. 2008) (citing FDIC v. Mijalis,
15 F.3d 1314, 1326 (5th Cir. 1994) (holding that pro se litigant waived
argument on appeal where he “utterly failed” to assert an argument in the
district court)); cf. Law Funder, L.L.C. v. Munoz, 924 F.3d 753, 759 (5th Cir.
2019) (“[I]n failing to oppose” an adversary’s motion, “Munoz has forfeited
any argument that the district court’s . . . order was improper.”); Vaughner
v. Pulito, 804 F.2d 873, 877 n.2 (5th Cir. 1986) (“If a party fails to assert a
legal reason why summary judgment should not be granted, that ground is
waived and cannot be considered or raised on appeal.”).
Last, the Burkes challenge the district court’s dismissal without
prejudice of their case against Ocwen for want of prosecution. “We review
a dismissal for want of prosecution or failure to obey a court order for abuse
of discretion.” Larson v. Scott, 157 F.3d 1030, 1032 (5th Cir. 1998). “A
district court sua sponte may dismiss an action for failure to prosecute or
comply with any court order.” Id. at 1031 (citing Fed. R. Civ. P. 41(b)).
As noted, after determining that the Burkes’ Collection Claims were barred
by res judicata, the district court granted the Burkes leave to amend their
complaint because their RESPA claim did not meet the pleading
requirements of Federal Rule of Civil Procedure 8. The court’s order was
clear: “Failure to file an amended complaint within twenty-one days will
result in dismissal of the Burkes’ case without further notice.” The Burkes
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did not file an amended complaint within that timeframe, so the district court
dismissed the action without prejudice. On these facts, we cannot say that
the district court abused its discretion. See State of La. v. Sparks, 978 F.2d
226, 229, 233 (5th Cir. 1992) (holding that “[t]he district court did not err in
dismissing with prejudice for lack of prosecution” where, inter alia, “the
district court gave the parties warning prior to dismissal that if neither did
anything, the case would be dismissed in two weeks” and neither party
responded).3
III.
We turn next to the Burkes’s appeal of their action against the
Attorney Defendants. They first challenge the district court’s denial of
remand. As the district court explained, the Burkes’s operative complaint
alleges that the Attorney Defendants violated a federal statute, the FDCPA,
and thus the court could exercise federal-question jurisdiction. Accordingly,
the district court correctly denied remand. See Scarlott, 771 F.3d at 887.
The Burkes next challenge the district court’s dismissal of claims
based on the attorney immunity doctrine. The district court determined that
3
The Burkes make a passing reference to having been denied due process by not
being permitted to engage in discovery. Because we conclude that the district court did not
err in dismissing the action, the Burkes were not entitled to proceed to the discovery phase.
Further, in three single-sentence paragraphs devoid of legal argument or citation
to authority, the Burkes make the conclusory assertion that the district court erred in not
granting their motion (1) to strike Ocwen’s supplemental response to their stay motion,
(2) for reconsideration, and (3) to reinstate their case. The district court implicitly denied
the first two motions by not expressly ruling on them and specifically denied the motion to
reinstate. The Burkes’s single-sentence arguments on appeal are plainly inadequate and
are therefore forfeited. See Jones v. City of Austin, 442 F. App’x 917, 920 (5th Cir. 2011)
(“While ‘we liberally construe briefs of pro se litigants and apply less stringent standards to
parties proceeding pro se than to parties represented by counsel, pro se parties must still brief
the issues and reasonably comply with the standards of [Federal] Rule [of Appellate
Procedure] 28.’” (quoting Grant v. Cuellar, 59 F.3d 523, 524 (5th Cir. 1995)).
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the Burkes’ claims were subject to dismissal under the attorney immunity
doctrine because the allegations concerned the conduct of the Attorney
Defendants in their capacity as lawyers representing Deutsche Bank in the
underlying foreclosure proceeding.
“We review de novo a district court’s denial of a motion to dismiss
based on immunity[.]” Kelly v. Nichamoff, 868 F.3d 371, 374 (5th Cir. 2017)
(quoting Troice v. Proskauer Rose L.L.P., 816 F.3d 341, 348 (5th Cir. 2016). In
considering a motion to dismiss under Federal Rule of Procedure 12(b)(6),
we accept all factual allegations as true and construe the facts in the light most
favorable to the plaintiff. Id.“Under Texas law, attorney immunity is a ‘comprehensive
affirmative defense protecting attorneys from liability to non-clients,
stemming from the broad declaration . . . that attorneys are authorized to
practice their profession, to advise their clients and interpose any defense or
supposed defense, without making themselves liable for damages.’” Id.(quoting Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015)
(alteration in original) (second set of internal quotation marks omitted)).
Dismissal based on the attorney immunity defense is proper when “the scope
of the attorney’s representation—and thus entitlement to the immunity—
[i]s apparent on the face of the complaint.” Id.The Burkes argue that Shelley Hopkins is not entitled to attorney
immunity because she allegedly worked as a lawyer on “an on-again-off-
again” basis. But the Burkes do not contend that any of Shelley Hopkins’s
challenged conduct occurred at a time other than when she was acting in her
capacity as an attorney in the foreclosure case. Rather, all of the relevant
claims relate to conduct that occurred during the course of the foreclosure
case. For example, the Burkes’s amended complaint contends that the
Attorney Defendants committed fraud by failing to disclose evidence during
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the foreclosure litigation of predatory lending by Deutsche Bank and
committed civil conspiracy by working in concert to suppress evidence and
make false statements to the district court. The Burkes’s contention that
Shelley Hopkins did not serve as counsel in the foreclosure case at all times
is unavailing.
The Burkes also argue that Mark Hopkins is not protected by the
doctrine because of a statement he made in a court proceeding concerning
the Burkes’s mortgage loan file. The Burkes appear to reference a conference
before the district court in 2017 in the underlying foreclosure litigation
wherein Mark Hopkins informed the court that he had reviewed the Burkes’s
mortgage “file, which wasn’t put in evidence before the Court.” Although
the Burkes now state on appeal that Mark Hopkins withheld this evidence
from them, they do not point to anywhere in their operative complaint where
they actually alleged that Mark Hopkins wrongfully withheld the file. The
Burkes fail to show that the district court erred in applying attorney
immunity.4
Finally, the Burkes contest the district court’s dismissal of their case
with prejudice. We review the district court’s decision only for abuse of
discretion. See Club Retro, LLC v. Hilton, 568 F.3d 181, 215 n.34 (5th Cir.
2009). The court granted the Burkes leave to amend their complaint once
and the Burkes then requested leave to file a second amended complaint. The
4
The Burkes make the conclusory assertion that their claim for unjust enrichment
is “valid” but do not set forth any further argument challenging the district court’s
determination that their claim is barred by the attorney-immunity doctrine. Thus, this
issue is forfeited. See Price v. Digital Equip. Corp., 846 F.2d 1026, 1028 (5th Cir. 1988)
(“Although we liberally construe the briefs of pro se appellants, we also require that
arguments must be briefed to be preserved.”). The Burkes also block quote a portion of
the magistrate judge’s report related to its conclusion that they failed to state a claim under
the FDCA or the TDCA. They do not, however, meaningfully challenge the district
court’s decision and have therefore forfeited any such argument. See id.9
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Burkes did not present any additional facts that they would add to a second
amended complaint nor did they attach a proposed amended complaint to
their motion for leave to amend. The court denied the Burkes’s motion. In
ruling on the motion to dismiss the Burkes’s operative complaint under Rule
12(b)(6), the court determined that dismissal with prejudice was warranted
because further amendment would be futile. Based on the history of the case,
the district court observed, the Burkes are “unwilling or unable to amend in
a manner that will avoid dismissal.”
Construing the Burkes’s pro se argument liberally as a challenge to
both the denial of leave to amend their complaint a second time and to the
dismissal with prejudice, we agree with the district court. After providing the
Burkes the opportunity to amend their complaint once, we cannot say the
court abused its discretion in denying their request for leave to amend their
complaint a second time where their motion did not explain what new facts
they would allege nor attach a proposed amended complaint. See Goldstein v.
MCI WorldCom, 340 F.3d 238, 255 (5th Cir. 2003) (affirming denial of leave
to amend where the plaintiff did not specify how a second amended
complaint would differ and did not attach a proposed second amended
complaint); McKinney v. Irving Indep. Sch. Dist., 309 F.3d 308, 315 (5th Cir.
2002) (finding no abuse of discretion in the district court's denial of leave to
amend where the plaintiffs failed to file an amended complaint as a matter of
right or submit a proposed amended complaint in a request for leave of the
court and the plaintiffs failed to alert the court as to the substance of any
proposed amendment). For similar reasons, the court did not abuse its
discretion in dismissing the case with prejudice after determining that the
Burkes failed to state a claim and were not able or willing to amend their
complaint so as to avoid dismissal. Indeed, on appeal, the Burkes remain
unable to persuasively explain how they could amend their complaint in a
manner that would state a plausible claim for relief.
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IV.
For these reasons, the judgments of the district court are
AFFIRMED.5
5
All pending motions are denied as moot.
11