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Hubbard v. Citi Mortgage, Inc.

United States District Court, D. Minnesota

March 31, 2014

MARGARET HUBBARD, DANIEL HUBBARD, and PAUL ERNEST SELLORS, Plaintiffs,
v.
CITI MORTGAGE, INC., JANE FRASER, FOLEY & MANSFIELD, PLLP, THOMAS HARDER, and CAMERON LALLIER, Defendants.

Margaret Hubbard and Daniel Hubbard, Post Office Box 461966, Aurora, CO 80046, and Paul E. Sellors, Post Office Box 18532, Minneapolis, MN 55418 pro se.

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

MEMORANDUM OPINION AND ORDER ADOPTING REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE

JOHN R. TUNHEIM, District Judge.

Before the Court is a motion to dismiss by defendants Citi Mortgage, Inc. ("CitiMortgage"), its Chief Executive Officer Jane Fraser, the law firm representing it, Foley & Mansfield PLLP ("Foley"), and Foley attorneys Thomas Harder and Cameron Lallier (collectively, "Defendants") pursuant to Federal Rules of Civil Procedure 12(b)(5) for ineffective service of process and 12(b)(6) for failure to state a claim. On December 4, 2013, United States Magistrate Judge Janie S. Mayeron issued a Report and Recommendation ("R&R") recommending that the Court grant the motion to dismiss the case without prejudice for ineffective service under Minnesota law. Plaintiffs Paul Ernest and Daniel and Margaret Hubbard now object to the R&R, asserting that service of process was proper. Having conducted a de novo review of the portions of the R&R to which Plaintiffs object, see 28 U.S.C. § 636(b)(1); D. Minn. LR 72.2(b), and having carefully reviewed the submitted materials, the Court will overrule Plaintiffs' objections and adopt the R&R because the Court finds that Plaintiffs failed to show that service of process was adequate and will thus dismiss Plaintiffs' claims against all Defendants.

BACKGROUND

I. COMPLAINT

Plaintiffs commenced this action on July 26, 2013, in Hennepin County District Court. (Notice of Removal, Ex. A (Summons and Complaint ("Compl.")), Aug. 13, 2013, Docket No. 1.) Plaintiffs' allegations are unclear, but seem to arise from CitiMortgage's foreclosure on real property owned by plaintiffs Daniel and Margaret Hubbard in Colorado. (Compl. at 7-8.)[1] Specifically, Plaintiffs' Complaint alleges that Defendants committed fraud "by making unfounded entries into the public record" regarding a non-existent foreclosure. ( Id. at 7.) Plaintiffs filed an "Unlimited Civil Action" against Defendants for violating (1) the Preamble to the Bill of Rights, (2) the First Amendment, (3) "18 U.S.C. § 47 FRAUD AND FALSE STATEMENTS, " and (4) 18 U.S.C. § 13 "CIVIL RIGHTS." (Compl. at 5.)

Plaintiffs further allege that Defendants "abused their public office" by persuading "United States Officials into violating United States organic and Code ordinances, thereby conspiring to deny Injured Claimant's natural rights." ( Id. at 7.) As relief, Plaintiffs seek fifty ounces of 0.999 pure gold or a Federal Reserve Note equivalent to $65, 000 to be paid to each injured claimant, and for any interest in a specified piece of real property located in Colorado. ( Id. at 8.)

II. REMOVAL AND MOTION TO DISMISS

The Defendants removed the action to federal court on August 13, 2013, pursuant to 28 U.S.C. § 1331(a) federal question jurisdiction, as the complaint alleged a violation of the First Amendment and various federal statutes. (Notice of Removal ¶¶ 6-7.) Defendants then moved to dismiss pursuant to Rules 12(b)(5) and 12(b)(6) for: (1) failure to properly serve the Summons and Complaint; and (2) failure to state a claim upon which relief can be granted. (Def.'s Mem. of Law in Supp. of Mot. to Dismiss at 4-12, Aug. 20, 2013, Docket No. 5.) Defendants' motion included an affidavit by Thomas Harder in which he affied that he and Defendant Lallier work for Foley, who represents CitiMortgage and Fraser, its CEO. (Aff. of Thomas A. Harder ¶¶ 1-3, Aug. 20, 2013, Docket No. 6.) The affidavit also states that the Summonses and Complaints for Defendants Harder, Lallier, and Foley were delivered to an employee of Foley who agreed to allow the two individuals delivering the papers "to hand the papers to her." ( Id. ¶¶ 4-6.) The affidavit states that the employee was not a partner of Foley, that she had not received approval to accept service on Foley's behalf (and that the deliverers had not asked her whether she could), and that she later handed all of the papers to Harder. ( Id. ¶¶ 6-7, 9.)

Plaintiffs responded to Defendants' Motion to Dismiss with an "Objection" to the Notice of Removal and Defendants' Motion to Dismiss. (Objection to Defs.' Mot. to Dismiss ("Mem. in Opp'n to Mot. to Dismiss") at 2, Aug. 26, 2013, Docket No. 8.)[2] Plaintiffs contend that removal of the lawsuit to the District Court violates Plaintiffs' due process rights because the District Court is a "foreign court" and being forced to submit to its jurisdiction is a "crime against the families on this land and a crime against the Minnesota Constitution." ( Id. at 3.) Plaintiffs also allege that Defendants used "trickery and magic" to establish federal jurisdiction. ( Id. ) With regard to service of process, Plaintiffs argued that it was valid because the Defendants "respond[ed] to the content in the papers which they supposedly never received." ( Id. at 5.) Plaintiffs' submission included preprinted "Personal Service Affidavits" for service on Lallier, Harder, and Foley signed by Donna Streier. ( Id., Ex. F at 29-31.)[3]

III. PROCEEDINGS BEFORE THE MAGISTRATE JUDGE

The Magistrate Judge held a hearing on Defendants' motion to dismiss on October 8, 2013. (Ct. Mins. for Civil Mot. Hr'g, Oct. 8, 2013, Docket No. 16.) There was no appearance by Plaintiffs or by anyone on Plaintiffs' behalf. ( Id. ) On December 4, 2013, the Magistrate Judge issued an R&R recommending that Defendants' Rule 12(b)(5) motion to dismiss be granted without prejudice for insufficient service of process. (R&R at 8, Dec. 4, 2013, Docket No. 17.) The R&R concludes that personal service for Foley was ineffective under Minnesota Rule of Civil Procedure Rule 4 because, based on the Harder Affidavit, service of process was delivered to an employee of Foley, Rita Larey, who was not authorized to receive service on its behalf. (R&R at 7.) The R&R concludes that service was ineffective for Harder and Lallier because, based on the Harder Affidavit, the Summonses and Complaints were handed to Larey and not personally served upon Harder or Lallier. ( Id. ) Finally, with regard to Fraser and CitiMortgage, the R&R concludes that service by mail was ineffective under Rule 4.05 because Plaintiffs provided no evidence of an acknowledgment of receipt, as required for service by mail under the rule. ( Id. )

Plaintiffs filed an "Exception to Document 17" on December 10, 2014, arguing that the R&R erred in concluding that service was not proper by erroneously looking only to Minnesota Rule of Civil Procedure 4.03, instead of Minnesota Rule of Civil Procedure 5.02(a), under which service to the relevant Defendants was proper. (Exception to Doc. 17 ("Objections to R&R") at 1-2, Dec. 10, 2013, Docket No. 18.) Plaintiffs argue that service on Fraser was proper under Rule 5.02 because it was mailed to her last known address. ( Id. at 2.) With regard to Lallier and Harder, Plaintiffs claim that service of process was proper because it was left "at the attorney's or party's office with a clerk or other person in charge thereof" pursuant to Rule 5.02(a). ( Id. at 1-2 (emphases omitted).) Plaintiffs argue additionally that a letter dated July 5, 2013, from Lallier "admitted" that "papers were delivered to the offices of Foley & Mansfield PLLP, " which counts as a "[w]ritten admission of service by the party or the party's attorney" under Rule 5.02. ( Id. (emphases ...


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