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Thompson v. Ocwen Financial Corp.

United States District Court, D. Connecticut

January 23, 2018

MEL THOMPSON, Plaintiff,


          Jeffrey Alker Meyer, United States District Judge.

         Plaintiff Mel Thompson believes his 2003 mortgage was fraudulent, and he has spent many years seeking relief in federal court. In this latest round of litigation, he asserts a variety of fraud-related claims against many defendants whom he has sued before, as well as against a law firm and one of its lawyers. Because plaintiff lacks standing for most of his claims and because his remaining claims fail as a matter of law, I will grant defendants' motions to dismiss.


         Plaintiff has filed an amended complaint (Doc. #44) that names the following defendants: Ocwen Financial Corporation and two of its officers (William Erbey and Ronald Faris); New Century Mortgage and one of its agents (Karen Smith); Deutsche Bank National Trust Company; Morgan Stanley Abs Capital I Inc.; the law firm of Bendett & McHugh as well as one of its attorneys (Alex Ricciardone); and Accent Capital and its owner (Terrence Riordan).[1] This case is the most recent of many federal lawsuits that plaintiff has filed stemming from what he claims was an allegedly fraudulent mortgage loan transaction for his home in 2003 and from the later unlawful efforts of defendants to collect or enforce the debt against plaintiff.[2] The first four counts of the amended complaint allege violations of different provisions of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. The remaining non-dismissed counts of the complaint allege violations of state law: the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. § 42-110a et seq. (Count 5); fraud (Count 6); negligence (Count 7); and slander of title (Count 8).

         Significantly for the disposition of this case, plaintiff filed a Chapter 7 bankruptcy petition on November 21, 2011. See In re Melvin Thompson, No. 3:11-bk-32924-LMW. Plaintiff listed on his bankruptcy schedules the various suits in which he was a party at the time he filed his petition, see Doc. #24 to id., which included two of his prior federal cases concerning this mortgage that were before Judge Thompson. See Thompson v. Barclays Capital Real Estate, Inc., d/b/a Barclays Homeq Servicing, No. 3:10-cv-317 (D. Conn. 2010); Thompson v. Accent Capital, No. 3:11-cv-69 (AWT), 2011 WL 3651848 (D. Conn. 2011), aff'd, 491 F. App'x 264 (2d Cir. 2012).

         On March 19, 2012, the trustee of plaintiff's bankruptcy estate, Barbara Katz, issued a report of no distribution. That same day she also filed a report of abandonment, in which she abandoned “all litigation in which the Debtor is a Plaintiff or Counter Plaintiff pending in the Connecticut Superior Court and in Federal Court, both District Court and the Court of Appeals.” Doc. #60 to In re Melvin Thompson, No. 3:11-bk-32924-LMW.

         Plaintiff eventually received his final discharge from bankruptcy on April 24, 2014, and the bankruptcy case was closed on October 8, 2015. At the time of plaintiff's discharge, he received a discharge injunction pursuant to 11 U.S.C. § 524(a)(2), which prohibits a creditor from attempting to collect on a personal liability which has been discharged in bankruptcy. All properly scheduled property of the bankruptcy estate that had not been discharged reverted to plaintiff's possession.


         Defendants have moved to dismiss the complaint on a variety of grounds under Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction and under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. It is well established that federal courts should ordinarily resolve any doubts about the existence of federal subject matter jurisdiction prior to considering the merits of a complaint. See, e.g., Rhulen Agency, Inc. v. Alabama Ins. Guar. Ass'n, 896 F.2d 674, 678 (2d Cir. 1990).

         For purposes of a Rule 12(b)(1) or Rule 12(b)(6) motion to dismiss, the Court must accept as true all factual matters alleged in a complaint, although a complaint may not survive unless its factual recitations state a claim to relief that is plausible on its face. See, e.g., Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Mastafa v. Chevron Corp., 770 F.3d 170, 177 (2d Cir. 2014); Lapaglia v. Transamerica Cas. Ins. Co., 155 F.Supp.3d 153, 155-56 (D. Conn. 2016). The Supreme Court has elaborated as follows on the “plausibility” standard for evaluating a motion to dismiss:

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.... The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.... Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.

Iqbal, 556 U.S. at 678. Naturally enough, because the focus of “plausibility” review is on what facts a complaint alleges, a court is “not bound to accept as true a legal conclusion couched as a factual allegation” nor “to accept as true allegations that are wholly conclusory.” Krys v. Pigott, 749 F.3d 117, 128 (2d Cir. 2014).

         Standing as to Claims of Bankruptcy Estate

         Defendants move to dismiss on grounds that plaintiff lacks standing to pursue claims that were the property of the bankruptcy estate. I agree for substantially the same reasons stated by Judge Hall in previously dismissing one of plaintiff's prior lawsuits against many of the same defendants now named in this action. See Thompson v. Ocwen Financial Corp. et al., 2013 WL 4522504, at *3-5 (D. Conn. 2013). As explained in Judge Hall's opinion, all causes of action possessed by a debtor when the debtor's bankruptcy petition is filed no longer belong to the debtor but to the bankruptcy estate. So too do causes of action that arise after filing but before the bankruptcy case is closed, at least if they are “sufficiently rooted in the pre-bankruptcy past.” See id. at *3 (explaining the different approaches different courts have taken as to this issue). Once a claim becomes part of the bankruptcy estate, it is only the trustee who has standing to pursue that claim until it has been validly abandoned. And while “properly scheduled estate property that has not been ...

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