United States District Court, D. Nebraska
MIKE K. STRONG, Plaintiff,
CALIBER HOME LOANS, INC., et al., Defendants.
MEMORANDUM AND ORDER
M. Gerrard United States District Judge
plaintiff, Mike Strong, is a persistent litigant. Another
word that might be used is "vexatious." Strong has
spent the last 5 years repeatedly raising the same spurious
claims in different courts. Each court has rejected his
claims, and rightly so. This Court will do the same:
Strong's claims remain meritless, and what's more,
they're barred by res judicata. The Court will dismiss
Strong's complaint with prejudice.
subject of this litigation is a residential property in Sarpy
County, Nebraska that is allegedly the target of a
nonjudicial foreclosure pursuant to the Nebraska Trust Deeds
Act, Neb. Rev. Stat. § 76-1001 et seq. See filing 24 at
2-3. The named defendants are Caliber Home Loans, Inc; U.S.
Bank Trust, N.A., as Trustee for LSF9 Master Participation
Trust; Kozeny & McCubbin, L.C. ("K&M") and
Kerry Feld, Successor Trustee; and HSBC Mortgage Services,
Inc.: all parties that, according to Strong, are involved in
conspiracy and fraud with respect to the "promissory
note, mortgage and deed of trust" associated with the
property. See filing 24. Generally speaking, Strong's
allegations revolve around the allegedly illegitimate
assignment of the promissory note used to buy the property
and the deed of trust that secured the note. See filing 24.
Strong claims that because the assignments were invalid, so
too are the ongoing attempts by the current holder of the
deed of trust to foreclose on it. See filing 24. But first,
it's necessary to back up a bit.
2013, Strong filed a "Memorandum in Support of
Declaratory Judgment" in the U.S. Bankruptcy Court for
the District of Nebraska, naming HSBC Mortgage Services as
the defendant. Bk. No. 13-8038, filing 1 at 1. (This was
before HSBC eventually assigned the deed of trust to U.S.
Bank Trust.) He asserted in that adversary proceeding,
"[a]t issue is who the Holder is and whether the
Defendant has the authority of or from the Holder. There is
no evidence that support the Defendant as having any
authority to claim the position of creditor."
Id., filing 1 at 1. He asserted that HSBC was
required to "produce the original wet ink signature as
evidence showing the true chain of title transfer leading to
the Defendant, endorsing the Defendant as the Holder in Due
Course." Id. at 5. He also filed a
"Declaratory Judgement of Verification of Debt," in
which he admitted he had signed a promissory note and deed of
trust with HSBC in 2007, but still asserted that it was
uncertain who actually held the note and deed of trust.
Id. at 12. The adversary proceeding was dismissed
after Strong failed to oppose HSBC's motion to dismiss.
Id., filing 8.
2015, Strong filed a Chapter 13 bankruptcy petition, in which
he listed the real estate as an asset he owned in fee simple,
subject to no secured claims. Bk. No. 15-80985, filing 1 at
8. He listed HSBC, K&M, and Caliber as unsecured
creditors, and described HSBC's claim as
"disputed." Id. at 17. He later filed a
"Memorandum in Support of Declaratory Judgment"
that was, in substance, the same as his 2013 memorandum.
Id., filing 13. The trustee moved to dismiss
Strong's case, asserting that Strong's actual debts
(as opposed to those disclosed in his petition) made him
ineligible for Chapter 13 relief. Id., filing 38.
The bankruptcy court granted the motion. Id., filing
2015 memorandum was the initial pleading for an adversary
proceeding against HSBC, K&M, and Caliber. Bk. No.
15-8029, filing 1. He also filed an "Affidavit of
Truth" reciting the various ways in which he had
demanded HSBC provide him with proof of its authority to
enforce the debt, and asserting that because HSBC had refused
his demands, there was "no evidence that HSBC Mortgage
Services Inc. was put at risk by extending the
above-referenced loan of credit[.]" Id., filing
3. So, he said, because HSBC "has not put forth any
consideration in the alleged contract" it "is null
and void." Id., filing 3. He followed that up
with a "Declaratory Judgement Verification of
Debt," again demanding the defendants "provide
proof of claim of perfection of their security interest as
well as claim as a creditor." Id., filing 28 at
moved to dismiss the adversary proceeding, based on the fact
that the mortgage loan had been sold to Caliber, and that
HSBC was not the owner of the note, holder of the deed of
trust, or servicer of the loan. Id., filing 43. The
bankruptcy court granted that motion. Id., filing
57. Caliber and K&M also moved to dismiss the adversary
proceeding. Id., filing 51. They argued that
Strong's allegations of mortgage fraud were legally
insufficient, and that Strong's pleading failed to state
a claim. Id., filing 52. That motion was also
granted, and the adversary proceeding was dismissed.
Id., filing 58.
point either shortly before or during the 2015 bankruptcy
proceedings, HSBC assigned the deed of trust to U.S. Bank
Trust. See filing 18-3. Strong was provided with written
notice of the sale of the mortgage loan. Bk No. 15-8029,
filing 28 at 37. But even before the bankruptcy proceedings
had been dismissed, Strong was in the District Court for
Sarpy County, Nebraska, filing his "Verified Complaint
Quiet Title Action Declaratory Judgment" against HSBC,
"Caliber Home Loans, Inc. - U.S. Bank Trust, N.A., as
Trustee for LSF9 Master Participation Trust," K&M,
and Feld. No. 8:15-cv-466, filing 1-1 at 18. He again
alleged, among other things, that there was "significant
controversy and clouding of the title to the property and
Deed of Trust" because there was" no evidence of
transfer of ownership from the true party of interest to the
Defendants." Id. at 25. Strong asserted that
the deed of trust and promissory note were connected, such
that "[w]here the promissory note goes, the Deed of
Trust must follow." Id. So, Strong concluded,
because they didn't possess the note, they didn't
have the right to enforce it by foreclosing on the deed of
trust. See Id. at 25-26.
the case was removed to this Court, Strong filed an amended
complaint asserting the same theories. See id., filing 26 at
11. Each defendant moved to dismiss the complaint. See id.,
filing 37 at 1. The Court found that Strong had failed to
state a plausible claim upon which relief could be granted,
and dismissed his amended complaint without prejudice.
Id. at 15. Judgment was entered on October 24, 2016.
Id., filing 38. Strong initiated the present case
back in Sarpy County district court on November 17, 2017.
Filing 1-1. The case was again removed to federal court.
Filing 1. Now, each defendant moves to dismiss. Filing 26;
filing 32; filing 34.
complaint must set forth a short and plain statement of the
claim showing that the pleader is entitled to relief.
Fed.R.Civ.P. 8(a)(2). This standard does not require detailed
factual allegations, but it demands more than an unadorned
accusation. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). The complaint need not contain detailed factual
allegations, but must provide more than labels and
conclusions; and a formulaic recitation of the elements of a
cause of action will not suffice. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). For the purposes of a
motion to dismiss a court must take all of the factual
allegations in the complaint as true, but is not bound to
accept as true a legal conclusion couched as a factual
survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a
complaint must also contain sufficient factual matter,
accepted as true, to state a claim for relief that is
plausible on its face. Iqbal, 556 U.S. at 678. 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.
Id. Where the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct,
the complaint has alleged-but has not shown-that the pleader
is entitled to relief. Id. at 679.
whether a complaint states a plausible claim for relief will
require the reviewing court to draw on its judicial
experience and common sense. Id. The facts alleged
must raise a reasonable expectation that discovery will
reveal evidence to substantiate the necessary elements of the
plaintiff's claim. See Twombly, 550 U.S. at 545. The
court must assume the truth of the plaintiff's factual
allegations, and a well-pleaded complaint may proceed, even
if it strikes a savvy judge that actual proof of those facts
is improbable, and that recovery is very remote and unlikely.
Id. at 556.
deciding a motion to dismiss under Rule 12(b)(6), the Court
is normally limited to considering the facts alleged in the
complaint. If the Court considers matters outside the
pleadings, the motion to dismiss must be converted to one for
summary judgment. Fed.R.Civ.P. 12(d). However, the Court may
consider exhibits attached to the complaint and materials
that are necessarily embraced by the pleadings without
converting the motion. Mattes v. ABC Plastics, Inc.,
323 F.3d 695, 697 n.4 (8th Cir. 2003). Documents necessarily
embraced by the pleadings include those whose contents are
alleged in a complaint and whose authenticity no party
questions, but which are not physically attached to the
pleading. Ashanti v. City of Golden Valley, 666 F.3d
1148, 1151 (8th Cir. 2012). The Court may also take notice of
public records. Levy v. Ohl, 477 F.3d 988, 991 (8th
defendants, for the most part, advance the same arguments.
Each argues that Strong has failed to state a claim. Filing
27 at 13-15; filing 33 at 2-4; filing 35 at 8-11. In
addition, each defendant argues that Strong's claims
should be dismissed as precluded by res judicata. Filing 27
at 10-12; filing 33 at 5-6; filing 35 at 10. And K&M,
Feld, and HSBC argue that Strong lacks standing. Filing 33 at
4-5; filing 35 at 8. The Court disagrees with the defendants
on standing, but agrees with respect to res judicata and
Strong's failure to state a claim.
The defendants' standing argument is premised on a
reading of Strong's complaint as seeking to void the
assignment from HSBC to U.S. Bank Trust: they each cite
Marcuzzo v. Bank of the West for the proposition
that "a borrower who is not a party to a mortgage
assignment, or a party intended to benefit from the
assignment, lacks standing to challenge the assignment."
862 N.W.2d 281, 290 (Neb. 2015). That's true enough,
under state or federal law. See id.; see also, e.g.,
Brown v. Green Tree Servicing LLC, 820 F.3d 371, 372
(8th Cir. 2016). But, while Strong's complaint is
certainly not a model of clarity, it does appear to the Court
that he's doing more than challenging the assignment:
rather, the focus of his complaint is on the purported fraud
that, he says, is responsible for the current foreclosure
attempts. See filing 24. And, he seems to be suggesting that
the assignment was not only voidable, but void ab initio: an
argument that the Marcuzzo court expressly distinguished from
the plaintiffs' argument in that case that the assignment
was ineffective because of deficiencies in the
defendants' paperwork. 862 N.W.2d at 291-92. In other
words, Strong isn't so much challenging the assignment as
presuming it's invalid as a premise for his other
arguments. So, Marcuzzo and Brown are not precisely
responsive to Strong's theory.
general principle, the heart of standing is that in order to
invoke the power of a federal court, a plaintiff must present
a "case" or "controversy" within the
meaning of Article III of the Constitution. Braden v.
Wal-Mart Stores, Inc., 588 F.3d 585, 591 (8th Cir.
2009). This irreducible constitutional minimum of standing
requires a showing of "injury in fact" to the
plaintiff that is fairly traceable to the challenged action
of the defendant, and likely to be redressed by a favorable
decision. Id. In most cases, a plaintiff's
standing tracks his cause of action: that is, the question
whether he has a cognizable injury sufficient to confer
standing is closely bound up with the question of whether and
how the law will grant him relief. Id.
is "important not to conflate the injury and
traceability requirements of a standing analysis with the
plaintiff's ultimate burden of proof as to the issues of
damages and causation at a trial on the merits."
Brown v. Medtronic, Inc.,628 F.3d 451, 457 (8th
Cir. 2010). Generally, Article III requires injury to the
plaintiff's personal legal interests. Braden, 588 F.3d at
591. And here, given the theories of recovery he asserts,
Strong has satisfied the requirements of Article III because
he has alleged actual injury to his own interests. Cf. id. at
592. But that, of course, doesn't mean that his
allegations actually warrant legal relief-while the
defendant's actions have certainly ...