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Citi Mortgage, Inc. v. Hubbard

United States District Court, D. Minnesota

March 31, 2014

CITI MORTGAGE, INC., Plaintiff,
v.
DANIEL HUBBARD, MARGARET HUBBARD, and PAUL ERNEST SELLORS, Defendants.

Cameron A. Lallier and Thomas A. Harder, FOLEY & MANSFIELD, PLLP, 250 Marquette Avenue South, Suite 1200, Minneapolis, MN 55401, for plaintiff.

Daniel Hubbard and Margaret Hubbard, Post Office Box 461966, Aurora, CO 80015, and Paul E. Sellors, Post Office Box 18532, Minneapolis, MN 55418, pro se.

MEMORANDUM OPINION AND ORDER ADOPTING THE REPORT AND RECOMMENDATION OF THE MAGISTRATE JUDGE

JOHN R. TUNHEIM, District Judge.

This case involves a dispute between Defendants Daniel Hubbard, Margaret Hubbard, and Paul Sellors (collectively, "Defendants") and Plaintiff Citi Mortgage, Inc. ("CitiMortgage") wherein CitiMortgage seeks relief on the basis of a fraudulent federal court order created by Defendants. United States Magistrate Judge Janie S. Mayeron issued a Report and Recommendation ("R&R") recommending that the Court dismiss the action and all pending motions for lack of subject matter jurisdiction because CitiMortgage has failed to either raise a federal question or establish diversity jurisdiction by demonstrating an amount in controversy greater than $75, 000. The Court will adopt the R&R over CitiMortgage's objections, concluding that CitiMortgage has failed to establish a basis for the Court's jurisdiction, and will dismiss the action without prejudice.

BACKGROUND

The relationship between CitiMortgage and Defendants began with a mortgage on a property in Colorado and CitiMortgage's attempt to foreclose on the property after mortgagors Daniel and Margaret Hubbard failed to make payments. (Aff. of Thomas Harder, Ex. D, July 3, 2013, Docket No. 44; Compl. ΒΆ 6, Jan. 16, 2013, Docket No. 1.)

In September 2012, CitiMortgage received a document that purported to be an order for trial to begin on September 21, 2012, in the "United States of America District Court, District of Minnesota" in a case between Daniel and Margaret Hubbard against CitiMortgage, which was signed by "Judge Paul Ernest Sellors, District Court Justice." (Compl., Ex. A ("Sellors Order").) CitiMortgage also received documents from Defendants challenging the authority of the United States government and the foreclosure of the mortgage. (Harder Aff. Ex. B-1 at 2-10, July 3, 2013, Docket No. 40; Harder Aff., Ex. B-2, July 3, 2013, Docket No. 41; Harder Aff., Ex. B-3, July 3, 2013, Docket No. 42.)

CitiMortgage brought this action alleging that the Sellors Order was fraudulent and seeking to declare the Order void, to enjoin Defendants from serving falsified documents, and seeking damages for the costs of responding to Defendants' filings. (Compl. at 4-6.) After CitiMortgage filed its Complaint, Defendants filed multiple entries on the docket, none of which are relevant to the instant Order. CitiMortgage filed a motion for summary judgment and the Magistrate Judge held a hearing on the motion, but Defendants did not appear. ( See Mot. for Summ. J., July 3, 2013, Docket No. 36; Minute Entry, Sept. 3, 2013, Docket No. 57.) After the hearing CitiMortgage moved for an Order to Show Cause why an order should not issue prohibiting Defendants from filing any further lawsuits except under certain conditions. (Mot. for Order to Show Cause, Sept. 9, 2013, Docket No. 59.) After this motion, Defendants began submitting additional filings, including one on September 17, 2013, and two on October 2, 2013. (Notice of Collusion to Deny Access to One of the Courts, Sept. 17, 2013, Docket No. 63; Response to Docket No. 64, Oct. 2, 2013, Docket No. 65; Notice of Am. Unlimited Civil Action, Oct. 2, 2013, Docket No. 66.) Among other things, these filings challenged the jurisdiction of the Court on the basis that there was not $75, 000 in controversy as required for diversity jurisdiction. ( See, e.g., Notice of Collusion to Deny Access to One of the Courts at 3; Response to Docket No. 64 at 2.)

The Magistrate Judge issued an Order on September 24, 2013, continuing the hearing on CitiMortgage's motion for summary judgment until October 8, 2013. (Order, Sept. 24, 2013, Docket No. 64.) Defendants did not appear at the continued summary judgment hearing. (Minute Entry, Oct. 8, 2013, Docket No. 67.) After the hearing, Defendants filed a motion for summary judgment (Defs.' Mot. for Summ. J., Oct. 31, 2013, Docket No. 68), which CitiMortgage moved to strike (Mot. to Strike Pleading, Nov. 21, 2013, Docket No. 69). Defendants filed several responses and documents in response to CitiMortgage's motion to strike ( see Response to Mot. to Strike, Dec. 6, 2013, Docket No. 73; Notice Praecipe for Judgment of Non Pros, Dec. 18, 2013, Docket No. 74; Demand for Disclosure and Discovery, Dec. 18, 2013, Docket No. 75), some of which again raised a challenge to the amount in controversy ( see Resp. to Mot. to Strike at 3). CitiMortgage filed a "Notice of No Reply" stating that it would not respond to Defendants' filings because "Defendants have failed to state any articulable reason or legal argument for denying the relief requested by the Plaintiff." (Notice of No Reply, Dec. 18, 2013, Docket No. 77.)

The Magistrate Judge issued an R&R on January 22, 2014, concluding that CitiMortgage failed to establish a basis for federal jurisdiction. (R&R, Jan. 22, 2014, Docket No. 78.)[1] The R&R concluded that there is no federal question jurisdiction because the face of CitiMortgage's Complaint raises no federal issue or claim and any violation of federal criminal law by Paul Sellors did not give rise to a private cause of action by CitiMortgage. (R&R at 17-19.) The R&R also concluded that there is no diversity jurisdiction because CitiMortgage had not shown by a preponderance of the evidence that the amount in controversy is more than $75, 000: the Complaint listed the damages amount as $10, 000 and CitiMortgage made no other showing. ( Id. at 19-21.) Defendants filed no objections to the R&R. CitiMortgage filed a limited objection, challenging only the R&R's conclusion that the court lacks jurisdiction. (Objections to R&R, Feb. 4, 2014, Docket No. 79.)

ANALYSIS

I. STANDARD OF REVIEW

Upon the filing of a report and recommendation by a magistrate judge, a party may "serve and file specific written objections to the proposed findings and recommendations." Fed.R.Civ.P. 72(b)(2); accord D. Minn. LR 72.2(b)(1). "The district judge must determine de novo any part of the magistrate ...


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