March 25, 2015
SHERRON L. LEWIS, JR., Plaintiff - Appellant,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION; LARRY CASTLE, in his individual and corporate capacity; CINDY LOWERY-GRABER; THE CASTLE LAW GROUP, LLC, Defendants-Appellees.
D.C. No. 1:13-CV-01375-PAB-KLM D. Colo.
Before KELLY, BALDOCK, and MORITZ, Circuit Judges.
ORDER AND JUDGMENT [*]
Nancy L. Moritz, Circuit Judge
Sherron L. Lewis, Jr., at all times proceeding pro se,  sued JPMorgan Chase Bank, National Association (Chase) and Larry Castle, Cindy Lowery-Graber, and The Castle Law Group, LLC (the Castle defendants), the lawyers and law firm representing Chase, for actions occurring during foreclosure proceedings on his home. Lewis asserted that defendants violated 42 U.S.C. § 1983; the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p; and state law. The district court granted defendants' motions to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
The parties are familiar with the facts as alleged in the complaint and set out in the documents properly considered in Rule 12(b)(6) proceedings. So we do not set forth here the details concerning the foreclosure activities arising out of the home equity line of credit (HELOC) and mortgage loan Lewis obtained from Chase that are at issue in this case.
Lewis asserted six causes of action against defendants: (1) intentional and negligent misrepresentation with respect to the HELOC; (2) denial of due process in violation of § 1983 with respect to the HELOC foreclosure proceedings; (3) intentional and negligent misrepresentation with respect to the mortgage; (4) denial of due process in violation of § 1983 during the mortgage foreclosure proceedings; (5) violation of the FDCPA and its Colorado counterpart by initiating the HELOC foreclosure action; and (6) violation of the FDCPA and its Colorado counterpart by initiating the mortgage foreclosure action. Lewis sought damages, an order declaring the foreclosure on his home null and void and that Chase had no ownership interest in the property or promissory note for the mortgage, and an order enjoining the sale and quieting title to the home.
Chase and the Castle defendants filed motions to dismiss under Rule 12(b)(6) asserting the complaint failed to state a claim upon which relief could be granted. The magistrate judge recommended granting the motions, specifically recommending dismissal with prejudice of the § 1983 claims and most of the FDCPA claims. Also, the magistrate judge recommended dismissal without prejudice of Lewis' state law claims as well as his claim that the Castle defendants violated FDCPA § 1692g.
Accepting the magistrate judge's recommendation, the district court dismissed with prejudice (1) Lewis' claims alleging due process violations under § 1983 as to defendants' actions concerning the HELOC and mortgage because Lewis alleged only a private misuse of state law and defendants were not state actors; (2) Lewis' assertions under the FDCPA that were barred by the statute of limitations; (3) Lewis' remaining FDCPA assertions against Chase because Lewis failed to sufficiently allege that Chase was a debt collector as defined by the FDCPA and because amendment, which Lewis had not requested, would be futile; and (4) Lewis' FDCPA assertions against the Castle defendants under §§ 1692e and 1692f because Lewis failed to object to the magistrate judge's recommendation. For the same reason, the district court also dismissed without prejudice Lewis' assertion under § 1692g of the FDCPA against the Castle defendants. Finally, the district court dismissed without prejudice all of Lewis' state-law claims including those asserted under the Colorado FDCPA because Lewis failed to object to the magistrate judge's recommendation that the district court decline to exercise supplemental jurisdiction over those claims.
I. Failure to Enter Default Judgment Against Chase
In this appeal, Lewis challenges the district court's failure to grant a default judgment in his favor after Chase failed to timely respond to his complaint. Lewis and Chase agreed to an initial extension of time for Chase to answer the complaint. When they did not reach a settlement within the stipulated extension time, Chase sought an unopposed additional one-week extension to permit continuation of settlement discussions. The magistrate judge granted the motion. Chase later moved for a second extension of time to respond to the complaint so that before filing its Rule 12(b)(6) motion it could confer with Lewis about amending the complaint in light of the dismissal of the foreclosure proceedings and the withdrawal of the foreclosure sale. Although Lewis opposed the motion, the magistrate judge granted the extension based on good cause and later denied Lewis' subsequent motion to alter or amend the extension order. The district court overruled Lewis' objection to the magistrate judge's denial of his motion to alter or amend. In addition, the district court denied Lewis' motion for a default judgment under Federal Rule of Civil Procedure 55(b), because he failed to obtain a default judgment under Rule 55(a), there was no basis for such a judgment, and in light of the strong preference for litigation on the merits.
We review the denial of a motion for default judgment for an abuse of discretion. See Bixler v. Foster, 596 F.3d 751, 761 (10th Cir. 2010). Under the facts of this case, where, as discussed below, the claims against Chase were subject to dismissal under Rule 12(b)(6), we conclude the district court did not abuse its discretion in refusing to enter default judgment against Chase. See id. at 762.
II. Substantive Claims Against All Defendants
Lewis also argues the district court erred in granting defendants' Rule 12(b)(6) motions because: (1) regarding the HELOC, he was deprived of a hearing required by due process before his funding was taken and if he had not sought bankruptcy protection, his home would have been taken; (2) regarding the mortgage, he was denied due process because no court sought to ascertain whether Chase possessed any legal interest in his home or the loan; (3) defendants were state actors when they commenced the foreclosure proceedings against him; and (4) defendants were acting as debt collectors because no evidence showed that either Chase or the Castle defendants possessed an interest in the loan before his default and Chase's employee testified he never saw a servicing agreement for the loan.
We review the district court's Rule 12(b)(6) dismissal de novo. See Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). A claim is facially plausible if the plaintiff has pled "factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged." Id. Although we accept as true all factual allegations in the complaint, we do not accept as true legal conclusions and conclusory statements. Id. at 678-79.
After considering the parties' briefs, the record on appeal, the appellees' appendices, and the relevant law in accordance with the de novo standard of review for dismissals under Rule 12(b)(6), we agree with the district court's dismissal of Lewis' claims. Accordingly, we affirm for substantially the same reasons as thoroughly delineated in the district court's March 24, 2014, order accepting the magistrate judge's December 12, 2013, recommendation. See R., Vol. 2 at 412-37 (district court order); id. at 332-59 (magistrate judge's recommendation).
The judgment of the district court is affirmed. Further, we deny defendants' requests for attorney's fees under Federal Rule of Appellate Procedure 38 for failure to comply with the Rule's separate-motion requirement, but we grant Chase's request for costs under Federal Rule of Appellate Procedure 39. See Fed. R. App. P. 39(a)(2) (taxing costs against appellant when judgment is affirmed).