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Hubbard v. Argent Mortgage Company LLC

United States District Court, D. Colorado

August 31, 2016




         THESE CONSOLIDATED ACTIONS come before the court on Defendant CitiMortgage, Inc.'s (“CMI”) Motion to Transfer Venue (doc. #4) [hereinafter the “CMI Motion”] and Memorandum in Support of Motion to Transfer Venue (doc. #5), filed on November 2, 2015 in Civil Action No. 15-cv-02375-WJM-CBS. Pro se Plaintiffs Daniel and Margaret Hubbard filed their Memorandum in Response (doc. #15) to the CMI Motion on November 24, 2015, which was followed by Defendant CMI's Reply Memorandum in Support of Motion to Transfer Venue (doc. #17), filed on December 8, 2015. The CMI Motion was referred to this Magistrate Judge pursuant to a memorandum (doc. #26) dated May 9, 2016.

         Also pending is Defendants Citi Residential Lending, Inc., CitiMortgage, Inc., and Citigroup Mortgage Loan Trust, Inc.'s (collectively the “Citi Defendants”) Motion to Transfer Venue (doc. #25) [hereinafter the “Citi Defendants' Motion”], filed on June 29, 2016 in Civil Action No. 16-cv-01445-WJM-CBS. The Hubbards have not responded to this motion.

         The district judge consolidated Civil Action No. 15-cv-02375-WJM-CBS and Civil Action NO. 16-cv-01446-WJM-CBS with an Order (doc. #36) dated August 9. 2016. In that Order, the district judge specifically noted that the Hubbards have brought two actions, “both of which appear aimed at preventing foreclosure on their home.” The Order went on to observe that while “the parties in the two actions are not entirely overlapping, the goal of both, apparently, is to invalidate the deed of trust on their residence. Thus, the two actions present essentially identical questions of law and fact.” The district judge directed this magistrate judge to “docket [an] order resolving the Motion to Transfer (EFC No. 25) both in Civil Action No. 15-cv-2375-WJM-CBS and Civil Action No. 16-cv-1446-WJM-CBS.” This court has reviewed the pending motions and the applicable law, and is sufficiently advised in the premises. For the following reasons, the court will grant the pending motions to transfer and direct that these consolidated actions be transferred to the District of Minnesota.


         The parties' litigious relationship apparently began on April 3, 2015 when CitiMortgage filed a declaratory judgment action in the United States District Court for the District of Minnesota, Case No. 15-cv-01870 (PJS/JSM) [hereinafter “the Minnesota Action”]. In its Complaint, CMI alleges that the Hubbards “are the mortgagers of property in Colorado, upon which [CMI] holds a valid and perfected mortgage.” See Exhibit A (doc. # 6-1, at ¶ 10, page 3 of 70), attached to the Affidavit of Thomas J. Lallier (doc. #6). The Complaint in the Minnesota Action further alleges that on or about July 8, 2010, Mr. Hubbard sent CMI a “demand note challenging the validity of the note and mortgage.” Id. at ¶ 12, page 3 of 70. In his letter, Mr. Hubbard insisted that CMI prove that it is “the current legal title holder-in-due course to the property” in question and further asserted that if CMI could not prove the validity of its claim, the Hubbards' account should “reflect a ‘0' balance owed and that all liens and encumbrances placed by CitiMortgage Inc. be removed and cancelled.” Mr. Hubbard also warned that if his account balance was not “reduced to a ‘0' . . . other severe penalties for dishonor in commerce, theft, racketeering, punitive damages, and the theft of public funds . . . will be incurred or assessed.” See Exhibit D (doc. #6-1, at pages 42-43 of 70) appended to the Complaint in the Minnesota Action and attached to the Affidavit of Thomas J. Lallier (doc. #6).

         The Hubbards sent CMI a second demand letter on or about December 28, 2011. While that letter purports to advance various legal arguments (most of which are difficult, if not impossible, to follow), the December 2011 letter closed with a warning that if CMI failed to “discharge” the Hubbards' account, they would view that “dishonor . . . as a commercial injury, violation of agreement, fraud, fraud by scienter, violation of commercial law and otherwise.” See Exhibit E (doc. #6-1, at page 45 of 70) appended to the Complaint in the Minnesota Action (page 3 of 10) and attached to the Affidavit of Thomas J. Lallier (doc. #6). In these and subsequent letters, the Hubbards took the position that CMI's failure to respond to their demands and legal arguments “will vitiate the mortgage which [CMI] holds on the property.” The Hubbards consistently have maintained that they have the “right to rescind, revoke or otherwise abolish the mortgage rights of [CMI] or note owing to [CMI].” See Exhibit A (doc. # 6-1, at ¶¶ 16-18, page 4 of 70), attached to the Affidavit of Thomas J. Lallier (doc. #6). In the Minnesota Action, CitiMortgage seeks declaratory relief under the Truth in Lending Act, 15 U.S.C. § 1601 et. seq., the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq., and the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. The Minnesota Action also seeks compensatory damages for injuries caused by Defendants' “conspiracy to defraud, harass, and injure” CitiMortgage, as well as injunctive relief barring the Hubbards and their co-conspirator (Daniel Sellors) “from serving any false and fraudulent papers or pleadings on the Plaintiff.” See Exhibit A (at page 10 of 70), attached to the Affidavit of Thomas J. Lallier (doc. #6).

         The Hubbards filed a Response in the Minnesota Action on May 11, 2015. See Exhibit B (doc. # 6-3), attached to the Affidavit of Thomas J. Lallier (doc. #6). In that pleading, the Hubbards asked the district court to “dismiss” CMI's lawsuit and to “Declare RESPONDENTS' Rights and Status outlined herein.” Id. at page 6 of 18. While their Response is not a model of clarity, the Hubbards insist that CMI's rights under the mortgage and note have been fully discharged or supplanted by “CITIMORTGAGE INC.'s acceptance of FULL PAYMENT via the INTERNATIONAL PROMISSORY NOTE . . . which was received, accepted and kept by CITIMORTGAGE, INC. on MAY 7th 2014.” Id. at page 10 of 18. The Hubbards further request that the Minnesota court dismiss them from that action “and injunct PLAINTIFF from further debt collection activities against RESPONDENTS.” Id. at pages 11 and 12 of 18.

         Approximately four months after they filed their Response in the Minnesota Action, the Hubbards initiated litigation in the District Court for Arapahoe County, Colorado. See Exhibit 1 (doc. #1-1), at pages 7-13 of 52, attached to Defendant CitiMortgage, Inc.'s Notice of Removal in Civil Action No. 15-cv-02375-WJM-CBS. In their Complaint, the Hubbards maintain that the note and mortgage on their property were not properly transferred and name as defendants Argent Mortgage Company, LLC; CitiMortgage, Inc., as Argent's successor; and Mortgage Electronic Registration Systems, Inc. as nominee for CMI. In sum, the Hubbards seek “a declaration that they are the sole title holder to the Property” and a judicial finding “that Defendants, lack any interest in the subject property which would permit them to foreclose, evict, or attempt to foreclose or evict the trust deed and/or to sell the subject properties.” Id. at page 12 of 52.

         The Arapahoe County District Court case was removed to this federal district court on October 27, 2015 by CMI pursuant to 28 U.S.C. §§ 1332, 1441, and 1447. The Notice of Removal (doc. #1) states that “Plaintiffs and all properly joined Defendants are citizens of different states and the amount in controversy exceeds $75, 000.” On November 2, 2015, CitiMortgage, Inc. moved to transfer Civil Action No. 15-cv-02375-WJM-CBS (hereinafter the “2015 Colorado Action”) to the District of Minnesota. After receiving the Hubbards' Memorandum in Response, this court set a hearing for 3:30 pm on June 14, 2016 to address Defendant's CMI's motion to transfer. On June 3, 2016, Mr. Hubbard filed an emphatic notice (doc. #28) stating “I do not consent to these proceedings!" Mr. and Mrs. Hubbard did not appear for the hearing on June 14, and did not contact the magistrate judge's chambers to request leave to appear by telephone or to re-schedule the hearing.

         Notwithstanding the pending Minnesota Action and the motion to transfer filed in the 2015 Colorado Action, the Hubbards filed another lawsuit in Arapahoe County District Court on or about May 16, 2016, in which they named as defendants GMAC Mortgage Corp., Chase Home Finance, LLC, Citi Residential Lending, Inc., CitiMortgage Inc., Mortgage Electronic Registry System, Inc., CitiGroup Mortgage Loan Trust, Inc., and U.S. Bank National Association.[1] This case was removed to the federal district court by the Citi Defendants on June 29, 2016 and designated Civil Action No. 16-cv-0446-WJM-KLM (hereinafter the “2016 Colorado Action”).[2] The Hubbards' First Amended Complaint (doc. #29) in the 2016 Colorado Action alleges, in pertinent part, that on August 14, 2015, CitiMortgage executed an Assignment of Deed of Trust to Citigroup Mortgage Loan Trust which “was recorded in the office of the clerk and recorder” on August 24, 2015. It is further alleged that “CitiGroup Trust has filed a motion under Rule 120 C.R.C.P in [Arapahoe County District Court] seeking to foreclose the Deed of Trust.”[3] See Exhibit 1 (doc. #1-1, at pages 2-7 of 30) attached to Defendants' Notice of Removal (doc. #1). The Hubbards' latest lawsuit seeks a declaration “that the Assignment of the Deed of Trust by CitiMortgage, Inc. to Citigroup Mortgage Loan Trust . . . is void.” Id. at page 7 of 30.

         On June 29, 2016, the Citi Defendants filed a Motion to Transfer Venue (doc. #25) in the 2016 Colorado Action. From a review of the court's docket, it does not appear that the Hubbards ever directly responded to the Citi Defendants' Motion to Transfer. However, on August 3, 2016, the Hubbards filed what they designated as “Papers in the Case” (doc. #37) and a “Memorandum of Law for Papers in the Case” (doc. #37-1). Mr. Hubbard filed an Affidavit (doc. #38) on August 3, 2016. The Hubbards filed what they denominated as “Estoppel by Record (doc. #40) on August 17, 2016, to which they attached a “Affidavit as Presented by Daniel Junior Hubbard” (doc. #40-1) and the previously filed “Memorandum of Law for Papers in the Case” (doc. #40-2).[4]


         As a threshold matter, the court should address its authority under 28 U.S.C. § 636(b)(1)(A) and (B) and Fed.R.Civ.P. 72(a) and (b). The Tenth Circuit has held that “[m]otions not designated on their face as one of those excepted in [§ 636(b)(1)(A)] are nevertheless to be treated as such when they have an identical effect.” First Union Mortg. Corp. v. Smith, 229 F.3d 992, 995 (10th Cir. 2000), citing Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1462 (10th Cir. 1988). A number of courts have held, however, that a motion to transfer venue does not have a dispositive effect, even if granted. See, e.g., Berentsen v. Titan Tech. Partners, Ltd., No. 08-cv-02415-MSK-KMT, 2009 WL 122564, at *1 (D. Colo. Jan. 15, 2009) (holding that a motion to transfer venue was not dispositive in nature because “if granted, it simply would move this litigation from one court to another”); Vanmeveren v. Int'l Bus. Machs. Corp., No. 03-1145-JTM, 2005 WL 3543179, at *2 (D. Kan. Dec. 27, 2005) (holding that defendants' motion seeking an intra-district transfer from Wichita to Kansas City was not dispositive because such a transfer would not prevent any party from pursuing its claims or banish either party from federal court). Cf. Franklin U.S. Rising Dividends Fund v. Am. Int'l Grp., Inc., No. 13-5805 (ILL), 2014 WL 3748214, at *2 (D.N.J. July 29, 2014); Siegler v. City of Columbus, No. 2:12-cv-00472, 2014 ...

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