*1 fаll Again, although these dates within temporal scope conspiracy, indictment, it is not clear conspiracy actually
when the formed. the date that “the illegal
Until conduct determined,
giving rise to forfeiture” is it impossible
is decide whether the “inno- defense,
cent owner” as set forth 983(d)(2)(A), applicable. very At the
least, possibility there is a that Vernon
Smith could be deemed the “innocent own- portion
er” of some of the funds that Mi- him in gave
chael 2003. reasons,
For these I believe that granting govern- court erred in
district summary judgment
ment’s motion for denying Smith’s request Vernon I
evidentiary hearing. would therefore va-
cate district court orders and remand proceedings.
the case for further SLORP,
Rick A. Plaintiff-Appellant,
LERNER, ROTHFUSS; SAMPSON & America, N.A.; Hill;
Bank of Shellie
Mortgage Registration Electronic
Systems, Inc., Defendants-Appellees.
No. 13-3402. Appeals,
United States Court of
Sixth Circuit.
Sept. *3 MOORE, GIBBONS,
BEFORE: and SUTTON, Judges. Circuit GIBBONS, SMITH JULIA Circuit Judge.
This case relates to misconduct separate in a state-court foreclosure ac- Lerner, tion. Sampson The law firm of & (LSR) Rothfuss filed that foreclosure ac- against tion Rick Slorp on behalf of its client, Bank of America. Because Coun- trywide originated Slorp’s mortgage, had LSR attached to the complaint assign- ment purporting assign an interest in Slorp’s mortgage to Bank of America. judgment state court awarded to Bank Slorp subsequently of America. retained questioned assignment’s counsel who validity, sought and he to depose Shellie Hill, employee the LSR who had executed on behalf of Mortgage Registration Systems, Electronic Inc. (MERS). promptly Bank of America dis- action, missed the foreсlosure and the judgment. state court vacated its LSR, against then filed this action Hill, MERS, and Bank re- of America to attorney’s expended cover the fees he in gravamen the foreclosure action. The complaint was that the defendants en- unfair, gaged deceptive, fraudulent and practices they debt-collection filed an' illegitimate against foreclosure action Slorp. The defendants moved dismiss complaint, that motion was pending, Slorp sought leave to amend his Slorp answered the After claim under the a civil to add America moved for Organi- complaint, Bank of Corrupt Influenced Racketeer common (RICO), §§ The court of summary judgment. 1961-68. U.S.C. zations Act Slorp moved that motion. granted the motion granted pleas court The district July judgment motion for leave from the denied the for relief dismiss and Hill affirm the served February We now complaint. amend tecum, demanding re- complaint but original subpoena duces dismissal with mo- evidentiary hearing denial of the court’s at an “appear verse the district that she complaint. demonstrating leave to amend her bring tion for documents with to the district court the -case and its relationship America] remand with [Bank *4 Slorp to amend permit demonstrating instructions predecessors, documents add a RICO claim. complaint Secretary as Assistant appointment her MERS, of Defendant president and Vice
I. related to the As- documents and other action separate day filed a LSR month later —on signment.” One in the Bank of America testify on behalf of at the Hill was scheduled before Pleas County Court of Common Franklin America vol- evidentiary hearing —Bank attached to action, Bank of America July 2010. untarily dismissed the foreclosure note dated De- promissory complaint its judgment. court vacated and the state The note named Coun- cember 2007. 7, 2012, Slorp filed this action On June Bank, the lender and FSB as trywide for the States District Court in the United Bank of America the borrower. Slorp as LSR, against of Ohiо Southern District mortgage that secured attached a also America, Hill, The and MERS. Bank of home. The note with promissory violation of complaint alleged a four-count renders the mort- poor printing quality Practices Act the Fair Debt Collection read, Country- but it lists difficult to gage 1692e; (FDCPA), a violation 15 U.S.C. Bank, the lender and MERS FSB as wide Practices Act Sales of the Ohio Consumer nominee. as the lender’s (CSPA), §§ 1345.02 and Ohio Rev.Code a docu- America also attached Bank of 1345.03; in violation of Ohio falsification ment, of Mort- captioned “Assignment 2921.13; conspiracy and civil Rev.Code MERS “does which states that gage,” falsification. to commit Servic- hereby to BAC Home Loans assign “falsely Hill According complaint, to the Countrywide fka Home Loans L.P.1 ing, because Coun- assignment executed” L.P. ... all of its interest Servicing, 9, 2010, July not exist on trywide Bank did Slorp from Rick A. that certain of MERS on employee Hill was not an Registration and Mortgage ... Electronic the behest of LSR Hill acted at Inc., Countrywide that datе. as nominee for Systems, knowledge, of America’s Bank, with Bank assignment was executed FSB.” The was and her “false statement MERS, Slorp, said “as nominee for Coun- on behalf of to mislead the FSB, purpose with the Bank, and as- made its successors trywide of her official Hill, judge performance in the purported to be signs,” by Shellie who foreclosure action.” function within the secretary president vice an assistant maintaining “filing July Slorp alleged was dated of MERS. false with the use of the foreclosure action by LSR. prepared and was currently Servicing an Loans and is Servic- Home Slorp alleges that BAC Home Loans America, Bank of N.A. Countrywide arm of ing formerly known as statements and evidence a because it constitute^] held that the RICO claim in the false, deceptive, misleading practice proposed amended complaint and/or was not via- attempt to collect a Slorp debt.” ble. had not any injury identified $8,934.44, sought damages actual treble caused the assignment, the court stat- $26,803.82, damages of statutory damages ed, and he therefore would not be able to $1,000, $5,000, non-economic obtain relief under RICO. timely and fees and costs. appealed.
Bank of America and MERS moved to
Slorp’s complaint,
dismiss
and LSR and
II.
separate
Hill filed a
motion to dismiss on
begin
with standing. Article III of
day.
parties
the same
After the
finished
the United States Constitution limits the
motions,
briefing those
Slorp filed an
power of
judiciary
the federal
adju
amended
without
seeking
first
dication of certain “Cases” and “Contro
the defendants’ consent or the court’s
Ill,
2,§
versies.” U.S. Const.-art.
cl. 1.
leave. The parties
pretrial
held a
confer-
From this textual
later,
sepa
limitation and “the
ence two days
pledged to
*5
ration-of-powers principles underlying that
file a motion for leave to amend within five
limitation,” the federal courts have
days of that conference.
“de
Slorp then filed a
duced a set of requirements that together
motion for leave to file a second amended
up
make
the ‘irreducible
complaint, together with his
constitutional
proposed sec-
”
Int’l,
ond
minimum of
complaint.
proposed
standing.’
amended
Lexmark
Inc.,
Inc. v. Static
complaint expanded
Components,
the factual
Control
allegations
— U.S. -,
1377, 1386-88,
134
alleging
and added a fifth count
S.Ct.
a violation
188
(2014)
RICO,
L.Ed.2d 392
(quoting Lujan
18 U.S.C.
v. De
The defen-
opposed
Wildlife,
dants
504
Slorp’s request for leave to
U.S.
fenders of
(1992)).
amend.
L.Ed.2d 351
components
Three
comprise this “irreduci
The district court
Slorp’s
denied
motion
(1)
ble constitutional
plain
minimum”:
the
for leave and
complaint.
dismissed the
fact,”
tiff must
“injury
have suffered an
in
The court
Slorp
held that
standing
lacked
(2)
injury
that
must be “fairly traceable” to
challenge
validity
to
the
of the
(3)
conduct,
the defendant’s challenged
because he was not party
assign-
to the
likely
it must be
that
plaintiffs injury
the
ment. The district court also concluded
would be
requested
redressed
the
re
Slorp
had not
suffered
at-
560-61,
Lujan,
lief.
еrror: It mistakes Holdings, Properties Livonia taken complaint. Slorp ry alleged Farmington Road LLC false injuries attribute his 12840-12976 does not LLC, we held that rather, where Holdings, he mortgage; his assignment of standing to chal- homeowner did have improper injuries attributes *6 assign- validity of home-loan lenge the the a According to litigation. foreclosure contesting a foreclosure. in an action ment (through America of complaint, Bank Cir.2010). (6th 97, 102 LSR) Fed.Appx. 399 against action a foreclosure filed in Livonia standing we discussed type in the of of despite its lack interest analogue of is a common-law Properties the trial the defendants misled mortgage; to standing, wholly unrelated Ar- statutory fraudulently by misrepresenting court entirely a creature suit; standing. It ticle III is interest in the Bank of America’s is assessed in contract law and of he was state incurred claim, the the of conjunction with merits If to defend his interests. compelled Assignments are a threshold issue. right file the not as had no to Bank of America matter, and, general a action, contracts it makes no difference law of contracts. by the common regulated had defaulted Slorp previously whether (2014). § 123 Assignments recover See 6A C.J.S. Slorp’s suit to mortgage.2 to party a A who is neither person America’s by Bank of damages caused parties, with the privity nor in compo contract of the three satisfies each lawsuit beneficiary a of third-party is not standing. is all who Article III That nents of contract, “standing” to one, is said to lack al count which required for that is to terms and chal- the contract’s federal enforce of the FDCPA —a leged a violation — v. validity. Kaplan Shure lenge its See Perry, v. Hollingsworth statute. See (7th Inc., 598, 602-03 Cir. Bros., 266 F.3d 186 -, 138 U.S. assertions that complaint, and the defendants’ not Although Slorp had defaulted whether issue, by may considered not be he default legal whether did pertinent to actual with a motion to court connection an district Slorp had remains issue defaulted allegations. testing Slorp’s in his dismiss concede dеfault case. did
255 2001) standing as an lacks (analyzing privity challenge assign contractual ment,” and standing); City Properties opinion issue of state-law Akron our Livonia of Inc., Aviation, 16057, quoted general v. No. 1993 and endorsed that state Castle (Ohio 191966, 9, ment, *2 Ct.App. perhaps inartfully. Fed.Appx. at June WL 1993) (“As general non-party may quickly rule a at 102. But we limited the scope rule, it rights clarifying non-party not assert contract unless is a of that that a third-party beneficiary may challenge under contract homeowner validity statute.”). standing or such is conferred to establish the assignee’s title, Properties among Livonia was one of innumera lack of other defects. Id. 132); recognizing general (citing Assignments § ble cases that this con 6A C.J.S. see Mellon, principle assignments, tract extends to also Carmack v. Bank N.Y. (6th Cir.2013) (“Li 508, subject exceptions. Fed.Appx. to various caveats and 511-12 also, e.g., standing See Druso v. Bank One Co vonia’s statement on should lumbus, 125, App.3d broadly preclude Ohio 705 N.E.2d be read all borrowers 717, challеnging validity 721-22 law.”). assignments Michigan under Thus analyze holding the district court’s non-party may challenge homeowner might ordinarily more detail than be putative assignment’s validity on the basis necessary Properties because our Livonia pass legal that it was not effective to title opinion has confounded some courts and putative assignee. See Conlin v. see, litigants, e.g., Etts v. Deutsche Bank Mortg. Registration Sys., Elec. 13-11588, Nat’l Trust No. 2014 WL Cir.2013); Props., Livonia (E.D.Mich. 2014) at *4 Feb. 102; Fed.Appx. at see also Woods that the (noting inexact use of the term Bank, N.A., Fargo Wells “standing” eligi- to denote a homeowner’s (1st Cir.2013); Assign 353-54 6A C.J.S. bility challenge aspects certain of a fore- (“The ques ments debtor also closure made it “unclear whether Defen- plaintiffs right tion a iaek of title or the challenging standing dants are Plaintiffs’ sue.”). Constitution, III under Article un- scheme, Michigan statutory der the *7 in dispute Prop- There was no Livonia both”), generally and has received more assignor assigned erties that the had title unpublished opinion attention than an rather, assignee; to the the homeowner might warrant. “standing” that the assign- lacked to assert ment not suf- properly was recorded and A. prevent- fered from technical defects that held, assignee establishing The district court and the defen- ed the from record maintain, In Michigan dants now that lacked chain of title under law. this case, contrast, alleges that Bank standing by to assert his claims because an America, assignee, who not an the held party assign- putative individual is a assignment’s mortgage ment not attack the neither nor the attendant va- his lidity. interpretation differ this note when it filed the foreclo- promissory with lacked the Properties. sweeping parties of Livonia The rule sure action because the authority assign that to Bank extrapolated the district court they purported our of America to do so. Properties Livonia dwarfs actual hold- ing in that case. The district court in That distinction makes all the difference. Conlin, (stating at that a Properties Livоnia stated that an individu- See if may challenge assignment al party assignment party “who is not a to an third applicable language specific to the assign- render the challenge would that standing to abstract void). rather than Slorp alleges statute that ment Because See, Valley Assocd. e.g., Ohio principles. fraudulent v. DeBra-Kuem & Builders Contractors therefore did hold Bank of America 582, 504, N.E.2d foreclosure,3 App.3d pel, 192 Ohio Livo- at the time title (2011) (discussing statutory stand his suit—in 585-87 does not bar Properties nia “only issue” is stating ing and fact, it. supports it was an “interested plaintiff whether the B. statute, the relevant party” as defined in notwithstanding”); standing “common-law govern also does not Properties Livonia Akron, Inc., No. Rose-Gulley Spitzer statutory assert Slorp’s standing to (Ohio 1736982, 21778, at *3 Ct. 2004 WL complaint. in his that he claims 2004) 4, (holding plaintiff App. Aug. discusses the defenses Properties Livonia claim be standing lacked to assert CSPA who face to homeowners that are available within the was not “consumer” cause she a ie., circumstances foreclosure — statute). incorporate “To meaning of that may impede which a homeowner foreclo- standing principles when common-law assignment of attacking sure legislature specifically has authorized Fed.Appx. at 102-03 mortgage. See 399 bring simply inappropri party to suit Assign- 6A (relying large part C.J.S. Valley Associated Builders & ate.” Ohio captioned ments which is “Defens- Inc., 190 Sys., v. Indus. Power Contractors es”). says nothing opinion That about N.E.2d App.3d Ohio may bring suit seek when a homeowner deceptive acts in (2010). redress fraudulent with a foreclosure.
connection Accordingly, to whether determine falsification, CSPA, bring standing had law affects Insofar as Ohio n standing to against the defen- conspiracy claims CSPA, falsification, bring the dants, only language we look claims, the relevant law is conspiracy N.E.2d Kuempel, statutes. those See those causes the statutes that create (“[C]ommon-law standing re- at 586-87 courts, Ohio Like the federal aсtion. establishing ‘person- quirements, such as distinguish between constitutional courts case, apply when the al stake’ do statutory standing. Ohio’s constitu- under stat- statutory standing [a issue is resembles its standing tional doctrine fed- ute].”). in Livonia principles outlined Fed. Home counterpart. eral See Loan here. Properties irrelevant Schwartzwald, 134 Ohio Mortg. Corp. v. 13, 979 N.E.2d 1218-20 St.3d IV. contrast, the Ohio state courts re- *8 By standing Article III Because has statutory standing have peatedly held Properties does not bar his and Livonia question to resolved with reference is be validity assignment. The statement of the opposition 3. In memorandum dismiss, requested relief rather than he relates to his defendants' stated motion pres- allegations: that he does not validity He not attacked the of the states that he "has invalidity of the opinion ently seek declaration assignment.” district court’s The statement, only for the assignment; he seeks quoted this which could be inter- This prior fraudulent conduct. defendants' preted an that thе admission allegations interpretation comports with the interpreta- But this was valid and effective. arguments in his in the allegations of fraud tion would belie the briefs, assign- that the language of which maintain all Slorp's complaint, and when that is context, invalid. dispute ment was it is clear that he does read
257
claim,
turn to the
senger
however,
we
merits.
al-
Corp. Morgan,
v.
the Su-
four
leged
preme
causes of action in his initial
effectively
Court
eliminated the se-
FDCPA,
complaint: a violation of the
rial continuing-violation
doctrine when it
1692e;
CSPA,
§
U.S.C.
a violation of the
held that “discrete discriminatory acts are
1345.03;
§§
Ohio
barred,
Rev.Code
1345.02 and
actionable if time
even when
falsification in violation
they
of Ohio Rev.Code
related to acts
in timely
2921.13;
conspiracy
and civil
charges.”
to commit
filed
536 U.S.
2061,
falsification. We take each claim in turn. S.Ct.
have never continuing-violation doctrine to an FDCPA claim. continuing-violation pro doctrine At appeals least one court of has stated vides that beyond violations “which occur in dicta that a defendant’s collection activi- the limitations period are actionable where ties might amount to a continuing violation plaintiff challenges just one incident of the FDCPA. See Solomon v. HSBC of unlawful prac conduct but an unlawful Mortg. Corp., Fed.Appx. 497 n. 3 (10th Cir.2010). tice that continues into the period.” limitations But that case included Frank, Ha ithcock allegedly FDCPA claims related to an (6th Cir.1992) (internal action, quotation baseless foreclosure and the court omitted). marks and alterations This deceptive concluded that the acts alleged court historically recognized two distinct in the complaint, including the foreclosure categories violations, action, continuing serial were discrete acts rather than con- systemic, each of which tinuing constituted a violations. Id. at 497. No court of narrowly exception limited general appeals has litiga- held debt-collection *9 (or rule begins that the limitations clock misleading tion a statement made in run at the time of gives litigation) the act that rise to connection with that is a con- the claim. Props. Portage See LRL v. tinuing violation of the See FDCPA. Auth., 1097, (S.D.) N.A., Metro Hous. 55 F.3d 1105 v. 340 Citibank Schaffhauser (6th Cir.1995). (3d Cir.2009) 128, In National Railroad Pas- Fed.Appx. (per 131 cu- 258 occurs, act whereas as that act soon as
riam) debt-collection ongoing (holding that work environment a hostile liability for continuing a constitute does litigation of conduct “proof repeated upon FDCPA); depends Naas v. Stol of the violation Id. at of time.” Cir.1997) period a extending over (9th 892, man, 893 130 12, plaintiff A there 122 120 S.Ct. n. limi statute of FDCPA’s (stating that the for hostile work may assert a claim fore when the debt-collec begins to run tations compo of on a series based environment the trial than when is filed tion suit rather of just one those that provided nent acts judgment).4 its court issues filing period. Id. within the occurred acts continuing-violation the Application of All the acts that 117, 122 of S.Ct. 2061. at incon would be claims to FDCPA doctrine environ work a claim for hostile comprise underlying principles with the sistent other ment, that would “including those of endorsement limited Court’s Supreme period,” are filing of the fall outside wise Morgan the In Morgan. that doctrine oc if of those acts timely one deemed acts between discrete differentiated Court window. limitations within the curred acts “Discrete continuing violations. Labor, 773, 409 F.3d Dep’t Sasse v. U.S. termination, promote, failure to such Cir.2005) Morgan, 536 U.S. (6th (citing 782 transfer, hire are or refusal to denial of 2061). 117, 122 at S.Ct. of those dis identify,” and each easy to and maintenance The institution separate a action “constitutes crete acts case is suit in this much the debt-collection 536 practice.” employment able unlawful act of discrimina to a akin discrete more (internаl 114, 122 quota 2061 U.S. at S.Ct. As hostile environment. tion than a work omitted). Only discrete those tion marks matter, a debt collector general a the limitations occurred within acts that abusive, or otherwise deceptive, initiates actionable; discrete prior “[a]ll are period lawsuit, no doubt that there is unfair untimely filed and discriminatory acts as it is claim—insofar viable— FDCPA 114-15, 122 Id. at longer actionable.” no Although the that date. subse on accrues envi of hostile work 2061. Claims may exacer of that suit quent prosecution contrast, ronment, “are different continued accrual damages, bate very Their nature acts. kind from discrete the fact does not diminish 115, 122 Id conduct.” at repeated involves discrete, suit was a of the the initiation over a series of “It occurs S.Ct. 2061. event.5 immediately actionable and, con in direct perhaps years days or sure, always will not acts, be an individual single act of To trast to discrete suit on its debt-collection recognize not be actionable harassment it is filed. unfair on the date deceptive discrete Liability attaches Id. own.” 437151, 98-CV-0990, LLP, WL at *3 No. held that decisions have 4. Most district court 3, 1998). (S.D.N.Y.Aug. suit prosecution of a collection the continued continuing under is not a violation Marcus, See, Erri e.g., v. FDCPA. McDermott divided whether relevant 5. Courts are 1, Brooks, P.C., co, F.Supp.2d & Emmer purposes accrual of FDCPA date (D.Mass.2012); Loan Ball v. Ocwen 46-47 suit is filed or date on is the which claim LLC, 12-CV-0604, WL Servicing, 1:No. defendant is served. on which the the date 16, 2012); (N.D.Ohio May at *5 Partners, CCR Ruth v. See Unifund Credico, Inc., F.Supp.2d v. Wilhelm Cir.2010). Because Bank Lewis, (D.N.D.2006); Egbarin v. Lewis & action was filed America’s foreclosure 3:00-CV-1043, LLC, WL Ferraro No. Slorp filed year before than more one served 31, 2006) (col (D.Conn. Jan. at *9 suit, dilemma. we need resolve Bruh, Kucker, cases); & lecting Kraus Calka *10 2009, Here, may Lilly have Ledbetter Fair example, Slorp Pay for learned Act of 5). 111-2,123 that the was fraudulent —and Pub.L. No. Stat illegiti that the foreclosure action was Even if the misrepresented defendants period expired. mate —after the limitatiоns in Slorp’s mortgage their interests when tolling But doctrines such as fraudulent relief, they opposed motion their discovery concealment and the rule exist to opposition motion is not indepen- continuing- address such situations. The dently actionable because it merely gave violation doctrine is concerned with wheth “present effect” to deceptive conduct that gives er the initial act rise to an actionable had occurred the outside limitations win- claim rather than whether the tortfeasor Ledbetter, dow. See 550 U.S. at Morgan, concealed that claim. See deceptive S.Ct. 2162. The defendants’ 12, 122 at 120 n. S.Ct. 2061. U.S. conduct, alleged complaint, con- unfair, sisted of their initiation of mislead- correctly Accordingly, the district court ing, legal process against and abusive continuing-violation held doctrine docketing and their concurrent of a cannot rescue claim from FDCPA assignment. fraudulent The defendants the limitations clock. .
did not commit a fresh viоlation of the
they
pleadings
FDCPA each time
filed
or
2.
memoranda reaffirming
legitimacy
Slorp’s proposed
In
amended com
suit; rather,
their state-court
those were
plaint
again
he
that the defendants
the continuing effects of their initial viola-
they opposed
violated the
FDCPA
tion.
effects
themselves have
“[S]uch
judg
motion for relief from the
present
legal consequences.”
no
See id.
disagree.
ment. We
(internal
omitted).
quotation marks
Led-
plaintiff
better held that the
not denied
plaintiff
alleges
A
who
several FDCPA
equal pay
pay-
each time she received a
violations, some of which occurred within
reflecting
discriminatory
check
pay
dis-
period
limitations
and some of which
parity.6 Id. It follows that Slorp was not
window,
occurred outside that
will be
or
deceived
abused anew each time the
from seeking
untimely
barred
relief for the
defendants
their deceptive
reaffirmed
violations,
that plaintiff
but
continue
throughout
litigation.
statements
to sеek relief for those
violations
oc
allege
Amendment of the
period.
curred within the limitations
See
second violation of the
therefore
FDCPA
Servs., LLC,
Purnell v. Arrow Fin.
would have been futile.
(6th Cir.2008).
Fed.Appx.
But
violations
occur within the limita
B.
violations;
tions window must be discrete
they
cannot be
later effects
an earli
The district court dismissed the CSPA
(citing
against
only
er time-barred violation. Id. at 302
claim
LSR—the
defendant
v.
there
Goodyear
Ledbetter
Tire & Rubber
named
count two—because
was no
pro-
550 U.S.
127 S.Ct.
167 “consumer transaction.” The CSPA
(2007),
statute,
unfair,
superseded
deceptive,
L.Ed.2d 982
hibits an
uneonsciona-
Congress
continuing-
Although
subsequently
interpretation
enacted
Ledbetter’s
resetting
superseding
statute
Ledbetter
generally.
doctrine more
See Lewis
violation
employee
205, 214-15,
statute of limitations each time an
City Chicago,
560 U.S.
paycheck reflecting
receives a
a discriminato-
resented that she was authorized to exe D. cute the on behalf of MERS. Slorp also alleged that the defendants The district court dismissed Slorp’s falsifi engaged in a civil conspiracy they cation claim because neither Hill nor LSR agreed to execute the fraudulent assign- charged had been with criminal falsifica falsify ment and to court documents. Yet tion. Section 2921.13 is a criminal statute. Slorp’s appellate directly brief does not It provides person that a guilty of a address his conspiracy claim and implicitly misdemeanor if the person knowingly acknowledges that the claim is derivative statement, makes a false knowingly or af is, of his falsification claim—that statement, firms the truth prior of a false concedes that the conspiracy count must circumstances, in various including when be dismissed if the falsification count is the statement pro is made an official dismissed. Because we affirm the dismiss- ceeding, the statement is made to mislead count, al of the falsification we affirm also public official in performing his or her the dismissal of this count as a matter of function, official or the statement is sworn course. notary public. before a Ohio Rev.Code 2921.13(A). But the statute also estab V. remedy: lishes a civil “A person who vio lates this section is liable a civil action to five, We turn to count which Slorp un- any person harmed by the violation for successfully sought to complaint. add to his death, injury, person property or loss to Slorp requested leave to amend his com- incurred as a result of the commission of RICO, plaint allege a civilviolation of 2921.13(G). the offense.” Id. §§ U.S.C. 1964. The district court
Ohio courts have held that criminal
denied the motion for
upon
leave to amend
charges are a
precedent
condition
concluding that amendment of the com-
institution of a civil cause of action under
plaint would be futile.
In the district
2921.13(G).
view,
section
In Hershey v. Edel-
court’s
adequately
“failed to
man,
example,
for
the court
allege
injury resulting
refused to
Assign-
here,”
recognize
liability
civil
under
at
“[cjonsequently,
section ment
issue
recorded with
to be
ment continues
a RICO claim
to state
has failed
Plaintiff
Recorder,
had to
County
Franklin
granted.”
can be
relief
upon which
wrongful foreclosure action.
deal with
for leave to
a motion
The denial
speculative,
of these
Most
ordinarily is reviewed
amend the
uncertain,
Berg v.
and undefined. Cf.
Dubuc Green
of discretion.
abuse
*13
(9th
First State Ins.
Cir.2002).
(6th
736, 743
312 F.3d
Twp.,
Oak
Cir.1990)
security and
loss of
(stating
futility,
of
on the basis
denial is
When
injuries
recoverable
mind
not
peacе of
novo.
however,
is reviewed de
decision
RICO).
faces no imminent
Slorp-
under
Id.
liability
double
because
potential
of
threat
makes
of RICO
germane provision
The
its
voluntarily dismissed
Bank of America
by or
employed
person
for a
unlawful
it
has
action and
foreclosure
state-court
affects
enterprise
an
associated with
that decision.
to revisit
shown no intent
partici-
to conduct or
commerce
interstate
as-
monetary
no
identifies
costs
Slorp also
enterprise’s
of the
in the conduct
pate
title.
the clouded
But
sociated with
through
pattern
racketeering
a
of
affairs
with
in connection
attorney’s
paid
fees he
1962(c). The
§
statute
activity. 18 U.S.C.
are real and quanti-
foreclosure
action
an
remedy that allows
indi-
a civil
provides
analysis therefore
damages,
our
fiable
and
damages
inju-
for
to recover treble
vidual
inju-
whether those fees were
focuses on
property
business or
person’s
to that
ries
in-
property
business or
Slorp’s
ries to
the RICO violation.
by reason of
sustained
al-
of the defendants’
by
curred
reason
1964(c).
§
18 U.S.C.
See 18
leged
violation:
U.S.C.
RICO
that amendment
argue
The defendants
1964(c).
§
be futile for three
complaint would
of the
(1)
cannot re-
Slorp
reasons:
independent
con-
inquiry
of this
The first component
injuries
because his
damages
cover RICO
proper-
“business or
on the term
centrates
default rather
to his own
are attributable
Man-
Sedgwick
v.
Claims
ty.” In Jackson
initiation of fore-
defendants’
than
Inc.,
Services,
court
the en banc
agement
(2)
proposed
proceedings;
closure
victim cannot recover
that a
held
RICO
a
identify pat-
complaint does
amended
injuries
from
personal
flowing
activity
racketeering
because he
tern
556, 564-70
731 F.3d
a RICO violation.
or
scheme
arti-
allege plausible
does
Cir.2013) (en banc).
dam-
Whether
(3)
defraud;
does not
Slorp
to
and
fice
injury
specific
victim’s
ages caused
support the exis-
facts to
allege sufficient
1964(c) deрends
§
under
are recoverable
take one at a
enterprise.
an
tence
underlying injury.”
origin
on “the
time.
injuries and
“personal
Id. at 565. While
per-
flowing from those
pecuniary losses
A.
relief under
to confer
injuries
sonal
fail
amended com
proposed
In Slorp’s
565-66, injuries
prop-
1964(c),”
id. at
injuries sus
alleges
he
numerous
plaint
losses
pecuniary
erty and at least some
defendants’ RICO
as a result
tained
injuries do
property
flowing
those
to defend himself
violations:
had
1964(c).
confer relief under
action,
improper
against
then,
is whether
question,
liability from oth
“potential multiple
faces
injuries
inju-
alleges personal
in the
interest
mort
ers who
claim an
pro-
According to the
property.
ries
note,”
title
possesses
“cloud[ed]”
gage or
count,
used
the defendants
RICO
assign- posed
fraudulent
his home because the
judgment
various schemes to mislead both
and obtained a
awarding them
attempted
the state court and thus
fraudu-
right
possession
to take
of.
lently
deprive Slorp
through
of his home
property injury
house. That direct
is not
sale. Those
illegitimate foreclosure
quantifiable because the state court ulti-
schemes revolved around a fraudulent mately
judgment
permit-
vacated the
related fore-
house,
ted
to retain his
unquan-
Thus,
closure action.
if we look to “the
injuries
tifiable
are not recoverable. See
origin
injury”
of the underlying
to deter-
Foods, Inc.,
Trollinger
Tyson
mine whether it relates to property, Slorp
(6th Cir.2004).
602, 614
But the attorney’s
alleged
has
quintessential property inju-
fees he incurred were pecuniary losses in-
object
ries: The
scheme to tertwined with the property injury and
*14
Slorp’s
defraud was to obtain title to
home
1964(c).
§
therefore are recoverable under
(i.e.,
property)
real
through foreclosure.
course,
inquiry
Of
This
specific injury for which
flows into the second
1964(c)
§
Slorp
injury
component
damages analysis,
seeks to recover is not an
his home—he did not lose title as a result
asks
injuries
which
whether thе
were sus
of the foreclosure action and therefore
“by
can
tained
reason of’ the
RICO
Rather,
damages
not obtain
on that claim.
violation.
phrase “by
reason of’ in
alleged injury
attorney’s
his
was the
fees
corporates a statutory-standing require
he incurred in connection with that foreclo
1964(c),
§
ment into
prohibiting
private
a
Jackson, however,
sure action. Under
plaintiff
recovering
RICO
from
for deriva
the point.
is beside
Jackson held that
injuries.
tive or passed-on
See Id. at 613-
pecuniary
flowing
losses
from those
14. This statutory-standing requirement
personal injuries were not recoverable be
is not at issue here because there is no
cause “an award of benefits under a work
dispute
about whether
is the proper
compensation system
ers’
any dispute
party to assert
these claims. But
over those benefits
inextricably
are
inter Holmes v. Securities Investor Protection
personal injury giving
twined with a
rise to Corp.,
Supreme
Court held that
the benefits.”
(permitting plaintiff RICO to recover dam ages resulting default ... which caused plaintiffs purchase action, to have to campground). Slorp interest suf defend the foreclosure injury anything Assign- fered an to his home as a result of not contained within the the defendants’ alleged premise scheme: The de ment.” But the factual of this fendants initiated foreclosure proceedings argument allega- contradicts the factual veracity accept required court overlooks complaint and
tions alleg- allegations. factual veracity of of to assume the obligation our proxi- property that were injuries to that the es Slorp alleges allegations. those allegedly by the defendants’ mately caused was fraudulent assignment proceed- of foreclosure initiation on his baseless to foreclose right had no defendants of his the fraudulent ings and were not author- defendants If the house. to recover He is thus entitled mortgage. proceedings, the foreclosure ized to initiate injuries unless he fails for those damages fraud by their injuries were caused burden, evidentiary either satisfy his alleged default. than his own rather trial. judgment or at summary Hill was an complaint, According MERS nor agent of neither authorized B. lacked the аnd she therefore Countrywide, must plaintiff A RICO successful mortgage to Bank authority assign in a true, engaged that the defendants establish Assuming that to be of America. racketeering activity.” must, wrongfully “pattern ini- of America we Bank 1962(c); also In re see ClassicS against U.S.C. proceedings tiated 473, 484 Litig., 727 F.3d tar Mare Lease proximately were and his Slorp, *15 Cir.2013). (6th Hill that LSR and contend institution of by the defendants’ caused racke pattern not identified a of that led has proceedings fraudulent foreclosure alleged he has not teering activity because alleg- The attorney’s incur fees. Slorp to or artifice to defraud. plausible scheme assignment allowed the de- fraudulent edly and conceal perpetrate fendants racketeering pattern of To establish court from by precluding state fraud allege least activity, plaintiff must at were whether the defendants ascertaining racketeering activity of two acts related initiate the foreclo- parties to prоper of contin- pose to or a threat that amount it was On facts proceedings. those sure activity. Brown v. ued criminal Cassens alleged misrepresentations defendants’ (6th 347, Co., 354 Cir. Transp. 546 F.3d led to his Slorp’s than default that rather 2008). doz- RICO statute enumerates The who- proper mortgagee, injuries. Had racketeering ens of that constitute crimes is, own elected to initiate that ever its. 1961(1). § Among activity. See 18 U.S.C. Slorp, he proceedings against foreclosure fraud, are mail 18 U.S.C. these crimes liability, and the have faced double would fraud, § 1341, 18 1343— § wire U.S.C. and would fraudulent defendants’ Slorp alleged crimes that predicate the two the anomalous and unlawful led to have complaint. Mail amended proposed in his mortgagees separate of two result —one (1) of a scheme or wire fraud consist foreclosing and one real fraudulent — (2) defraud; use of the mails or artifice to (cid:127) legitimate The fact that the Slorp’s house. in further- interstate wire communications foreclosure has not initiated mortgagee (3) scheme; ance of intent only reinforces conclusion proceedings money property. or deprive victim of fraudulent allegedly the defendants’ Turner, 667, 465 F.3d 680 United States injuries. led to Daniel, (6th Cir.2006); States v. United (6th Cir.2003). 480, “A sure, if 329 485 injuries will vanish beTo or of any plan course Amer- scheme defraud that Bank of prove the defendants intends to de- by which someone But action legitimate mortgagee. ica was the money property by or of prive court on a came to the district another case this pretenses, false or fraudulent dismiss, the means of posture and in motion to 1962(c)) (alterations representations, promises.” (quoting or United U.S.C. 573, original). enterprise An any “includes Faulkenberry, States v. 614 F.3d individual, (6th Cir.2010) (internal partnership, corporation, associ- quotation marks ation, or legal entity, any other omitted). union and alterations group of individuals associated fact LSR first argues Slorp’s allegations although a legal entity.” 18 U.S.C. are insufficient bеcause he cannot show 1961(4). that he relied on the defendants’ An “association-in-fact enterprise” is “a misrepresentations. But “a plaintiff as- group persons together associated for a serting a claim on mail predicated RICO purpose engaging common in a course show, fraud need not either as an element Turkette, of conduct.” United States v. prerequisite of its claim or as a to estab- 2524, 452 U.S. 101 S.Ct. causation, lishing proximate that it relied (1981). L.Ed.2d 246 The association-in- on the defendant’s alleged misrepresenta- enterprise fact separate must be and dis Bridge tions.” v. Phoenix Bond & Indem. tinct from the pattern racketeering ac 553 U.S. tivity in which it engages, but the enter argu- L.Ed.2d 1012 LSR’s first prise could have been solely formed for the right gate. ment stumbles out of the purpose engaging in the racketeering LSR also that “Slorp contends must al- activity. Ouwinga v. Benistar Plan lege plausible sufficient facts indicate Servs., Inc., 793-94 Cir. that LSR and Hill Ms. made a material 2012). enterprise “must have at least misrepresentation of fact to that was three structural purpose, features: a rela Slorp.” calculated or intended to deceive tionships among those associated with the just has done that. com- enterprise, longevity sufficient to per *16 plaint alleges and Hill filed that.LSR mit these pursue associates to the enter him complaint against misrep- state-court States, prise’s purpose.” Boyle v. United resenting that had been as- 556 U.S.
signed to Bank of America. He further L.Ed.2d 1265 The enterprise need alleges that LSR executed a fraudulent not have a hierarchical structure or chain assignment Slorp and served it on in con- command, group of members of the need nection with the foreclosure action. Ac- roles, group not have fixed need not cording Slorp, misrepre- to these material name, enterprise may have a and the en sentations were intended to deceive both gage “spurts activity punctuated by in of Slorp and thе state court. therefore periods quiescence.” of Id. at alleged precisely has what LSR demands S.Ct. 2237.
of him. adequately alleged has the exis- enterprise tence of an that satisfies these
C.
alleged
basic criteria. He
that the defen-
argues
LSR also
has not
conspired
dants
to draft and execute a
alleged sufficient facts
support
the exis
assign-
false
and to use the
enterprise.
tence of an
“The RICO stat
proceedings
ment in foreclosure
to seize
ute makes it unlawful for
...
‘any person
Slorp’s property.
alleged
He further
any enterprise
associated with
..to
con
the defendants used the mails and wires
directly
duct or participate,
indirectly,
in
several
times
furtherance
of
this
enterprise’s
scheme,
the conduct of such
affairs
and he
that the same de-
through a pattern
racketeering
of
activi
engaged
fendants have
in similar malfea-
ClassicStar,
ty.’”
proceedings,
In
all
re
properties that enterprise alleged association-in-fact longevi- sufficient purpose
thus had relation- lasting had its members
ty, and The defendants another. with one ships BERNARD, Plaintiff- Linda D. any of to rebut evidence may introduce Appellant, including the existence allegations, these dis- separate and that was enterprise activity, but racketeering from the tinct complaint are allegations MORTGAGE NATIONAL FEDERAL a motion dismiss.7 to survive sufficient Fargo and Wells ASSOCIATION court erred Accordingly, the district N.A., Defendants-Appellees, Bank, that amendment it determined a RICO count complaint to include be futile.
would Authority, Housing Finance Federal
VI. Intervenor-Appellee. the dismissal affirm No. 13-1477. falsification, FDCPA, CSPA, civil con- the dis- But we reverse spiracy claims. Appeals, States Court United for leave of the motion trict court’s denial Sixth Circuit. remand this to amend permit Slorp to the district court action 29, 2014. Sept. the RICO claim. pursue J., SUTTON, concurring. majority opinion part but join
I all of the that, majority agree I with the As to
V. denying decision the district court’s a civil claim
Slorp leave to add RICO *17 majority ex- be reversed. As the
should by court erred conclud-
plains, the district inju- cognizable suffered no
ing that conclusion was
ry, and that mistaken futile. leave to amend as
reason it denied poten- to address the proceed
Rather than in this viability of other RICO claims
tial that, let the it at
setting, I would leave in the those claims
district court address
first instance. Cir.2000), but that case has large part on VariDen- relies in
7. LSR’s brief Bridge Boyle. abrogated both Mortgage been Broeck v. CommonPoint