Debt Collector

Party Not Served: Dismissal With Prejudice is an Abuse of Discretion Sayeth Judge Stephen Higginson, CA5

An argument which was completed snubbed in Burke v. Ocwen Loan Servicing, L.L.C., No. 19-20267 (5th Cir. Mar. 30, 2021)

Loza v. Select Portfolio Servicing,

No. 19-40687 (5th Cir. June 26, 2020)

before Judges Higginson (author), Smith and Engelhardt.

No. 19-40687

06-26-2020

JULIO E. LOZA, Plaintiff – Appellant v. SELECT PORTFOLIO SERVICING, INCORPORATED; DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for Morgan Stanley ABS Capitol 1 Inc. Trust 2005-HE7, Mortgage Pass-Through Certificates, Series 2005-HE7; POWER DEFAULT SERVICES, INCORPORATED, Defendants – Appellees

STEPHEN A. HIGGINSON, Circuit Judge

Appeal from the United States District Court for the Southern District of Texas
USDC No. 7:17-CV-430

Before SMITH, HIGGINSON, and ENGELHARDT, Circuit Judges. STEPHEN A. HIGGINSON

HIGGINSON, Circuit Judge:

Pro se Plaintiff-Appellant Julio E. Loza obtained a loan secured with residential property in McAllen, Texas. He defaulted and brought the instant action challenging the resulting foreclosure proceedings.

The day before the deadline for pretrial motions, defendants Deutsche Bank National Trust Company (“Deutsche Bank”) and Select Portfolio Servicing, Incorporated (“SPS”) sent Loza new discovery documents.

In response, Loza filed a motion to amend the scheduling order, arguing that he needed time to review the new documents and possibly request additional discovery before filing a motion for summary judgment.

Deutsche Bank and SPS opposed the motion and filed their own motion for summary judgment.

The district court denied Loza’s motion, granted Deutsche Bank and SPS’s motion, and sua sponte dismissed the remaining claims against defendant Power Default Services, Incorporated (“PDS”) with prejudice for failure to prosecute.

Loza filed a timely notice of appeal.

He argues that there was good cause for the district court to grant his motion to amend the scheduling order, and the district court erred in dismissing his remaining claims sua sponte.

We AFFIRM in part, REVERSE in part, and REMAND.

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

C.   PROCESS OF SERVICE RE HOPKINS LAW, PLLC

(i)   Avoiding Service in Bad Faith: Hopkins brief raised eyebrows when it included – without citation to any case law – in footnote 9, p.14 of their brief, ‘Nothing prohibits a party from waiving formal service and appearing in a lawsuit.’ This statement is untrue. Hopkins did not waive service; Hopkins avoided service. Apart from the state court summons, the Burkes attempted to contact Hopkins about service for the corporation before the 120 days. Silence and unethical behavior does not qualify as waiver, rather Hopkins acted in bad faith.[24]

(ii)   Termination of the Motion to Supplement Service: The Burkes filed a motion to supplement service and for an extension of time re Hopkins. The court terminated the motions without proper notice and for no good reason as the case proceeded for a further year. The Burkes were wrongfully denied an opportunity to serve Hopkins when it was proven Hopkins was deliberately evading service. [25]

(iii)   The Law of the Unserved: Hopkins Law, PLLC, wasn’t served. In law, this commands dismissal without prejudice.

But instead should have warranted disciplining the two attorneys for intentionally evading service for the corporation. The judge(s) erred.[26]

I

First, Loza argues that the district court erred in denying his motion to amend the scheduling order. A scheduling order “may be modified only for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4).

We review a district court’s enforcement of its scheduling order for an abuse of discretion. United States v. Hale, 685 F.3d 522, 532 (5th Cir. 2012).

Deutsche Bank and SPS respond that Loza has waived this argument by failing to adequately brief it and, alternatively, the district court did not abuse its discretion.

“[W]e liberally construe briefs of pro se litigants and apply less stringent standards to [them].” Grant v. Cuellar, 59 F.3d 523, 524 (5th Cir. 1995).

However, “pro se parties must still brief the issues and reasonably comply with the standards of [Fed. R. App. P. 28].” Id.

For example, “an appellant [must] set forth his ‘contentions and the reasons for them, with citations to the authorities and parts of the record on which the appellant relies.'” Arredondo v. Univ. of Tex. Med. Branch at Galveston, 950 F.3d 294, 298 (5th Cir. 2020) (quoting Fed. R. App. P. 28(a)(8)(A)).

Nevertheless, “we can consider a pro se litigant’s non-compliant brief when the non-compliance did not prejudice the opposing party.” Id.

We have found that the opposing party was prejudiced when it was forced to “speculate as to the relevant issues” when preparing its own brief, Grant, 59 F.3d at 525, and when the pro se party’s brief was “confusing and layered with arguments that [were] not supported by the record,” Arredondo, 950 F.3d at 299.

We have found that the opposing party was not prejudiced when it fully briefed the sole issue in the case, no disputed facts clouded the resolution of the legal issue, and all that remained was to apply well-settled law to the facts. Price v. Digital Equip. Corp., 846 F.2d 1026, 1028 (5th Cir. 1988).

Loza’s brief does not contain citations to relevant legal authority,

but it does contain relevant record citations, including citations to the district court’s order which states the relevant legal standard and cites to relevant legal authority.

Moreover, whether Loza demonstrated good cause is a fact-intensive issue about which the law is well-settled.

Deutsche Bank and SPS adequately identified this issue and responded to Loza’s arguments in their brief. Therefore, we discern no prejudice and address this issue on the merits.

We consider four factors in assessing good cause:

(1) the explanation for the failure to comply with the scheduling order,

(2) the importance of the modification,

(3) potential prejudice in allowing the modification,

and

(4) the availability of a continuance to cure such prejudice.

Geiserman v. MacDonald, 893 F.2d 787, 791 (5th Cir. 1990).

Loza argues that he provided a reasonable explanation for his inability to comply with the existing scheduling order, but he does not challenge the district court’s finding that the modification was not important.

The district court found that Loza’s claims against Deutsche Bank and SPS all fail as a matter of law such that no facts Loza could have discovered and no arguments Loza could have made in his own motion for summary judgment would have altered the outcome of the case.

A district court does not abuse its discretion by denying a motion to modify a scheduling order when that modification would be futile for the moving party.

Therefore, we find no abuse of discretion.

D. HOPKINS LAW, PLLC, ET AL

Hopkins is a law firm practicing real estate law who, through the ordinary course of its business, regularly attempts to collect defaulted residential obligations from consumers.[6]

This [unserved[7]] entity

is a professional law corporation organized under the laws of the state of Texas.

II

Loza also argues that the district court should not have dismissed his remaining claims against PDS with prejudice for failure to prosecute.

The district court has the inherent power to dismiss an action sua sponte for failure to prosecute. McCullough v. Lynaugh, 835 F.2d 1126, 1127 (5th Cir. 1988).

We review such dismissals for abuse of discretion. Id.

“Dismissals with prejudice for failure to prosecute are proper only where

(1) there is a clear record of delay or contumacious conduct by the plaintiff

and

(2) the district court has expressly determined that lesser sanctions would not prompt diligent prosecution, or the record shows that the district court employed lesser sanctions that proved to be futile.”

Stearman v. Comm’r, 436 F.3d 533, 535 (5th Cir. 2006) (citing Tello v. Comm’r, 410 F.3d 743, 744 (5th Cir. 2005)); see also Coon v. Charles W. Bliven & Co., Inc., 534 F.2d 44, 48-49 (5th Cir. 1976) (“[D]ismissal of an action for failure to prosecute with reasonable diligence is . . . too harsh except in extreme circumstances.” (internal quotation omitted)).

Loza brought this lawsuit on October 2, 2017.

On February 7, 2018, he failed to appear for the initial pretrial and scheduling conference, and the district court ordered him to state, within ten days, whether he intended to prosecute his claims.

Loza responded by apologizing to the court for missing the hearing and “reaffirm[ing] his intention to prosecute this case to the best of his ability.”

Thereafter, it does not appear that Loza missed any other hearings or disobeyed any court orders.

Nevertheless, on July 8, 2019, the district court, in a final paragraph, sua sponte dismissed Loza’s claims against PDS. This dismissal was with prejudice.

The district court noted that “[t]he docket does not reflect that [PDS] has been served, or that Plaintiff has made any attempt to prosecute his suit against it,” but it did not cite to any contumacious conduct by Loza or expressly consider any lesser sanctions.

In McCullough, the only case cited by the district court in support of its sua sponte dismissal, we affirmed a dismissal without prejudice for lack of prosecution. 835 F.2d at 1127.

Given the paucity of briefing and the circumstances surrounding the claims against PDS, it is likely that the district court intended to dismiss without prejudice.

However, because the entered dismissal is with prejudice and the district court did not expressly consider or attempt to employ any lesser sanctions such as a warning or dismissal without prejudice, we are compelled to find an abuse of discretion.

Indeed, Federal Rule of Civil Procedure 4(m), which provides the time limit for service in federal court, says that “[i]f a defendant is not served within 90 days after the complaint is filed, the court—on motion or on its own after notice to the plaintiff—must dismiss the action without prejudice against that defendant or order that service be made within a specified time.” (emphasis added).

——–

A. DISMISSAL WITH PREJUDICE

“Dismissal with prejudice, however, is an extreme sanction that deprives a litigant of the opportunity to pursue his claim. Although on an appeal from the imposition of such a sanction this court will confine its review to a determination of whether the district court abused its discretion, we have consistently held that dismissal with prejudice is warranted only where “a clear record of delay or contumacious conduct by the plaintiff” exists, Durham v. Florida East Coast Railway Co., 385 F.2d 366, 368 (5th Cir. 1967), and “a lesser sanction would not better serve the interests of justice,” Brown v. Thompson, 430 F.2d 1214, 1216 (5th Cir. 1970). See Silas v. Sears, Roebuck Co., 586 F.2d [382] at 385 [5th Cir. 1978]; Boazman v. Economics Laboratory, Inc., 537 F.2d 210, 212 (5th Cir. 1976); Ramsay v. Bailey, 531 F.2d 706 (5th Cir. 1976), cert. denied,  429 U.S.  1107,  97  S.Ct.  1139,  51  L.Ed.2d  559  (1977);  Connolly  v. Papachristid Shipping Ltd., 504 F.2d 917, 920 (5th Cir. 1974); Flaksa v. Little River Marine Construction Co., 389 F.2d [885] at 888 [5th Cir. 1968]. 610 F.2d at 247 (emphasis added). – McGowan v. Faulkner Concrete Pipe Co., 659 F.2d 554, 556 (5th Cir. 1981).

There was absolutely no justification for the lower court to DWOP Ocwen without prejudice and Hopkins with prejudice.

There was no delay on behalf of the Burkes, nor contumacious conduct. That would be a case of mistaken identity. No, that conduct would match opposing counsel. The decision was an abuse of discretion.

***

For the foregoing reasons, we AFFIRM the district court’s denial of Loza’s motion to amend the scheduling order and its summary judgment dismissal of the claims against Deutsche Bank and SPS, we REVERSE the district court’s sua sponte dismissal with prejudice of Loza’s remaining claims against PDS, and we REMAND for further proceedings.

Judges Wiener, Willett and Richman Will Quickly Dispose of Judge’s Clear Corruption on the Bench

Y’all won’t see a ‘Kids for Cash’ type ruling in this case as the Fifth Circuit continues to embrace judicial ochlocracy and corruption.

The Deleted Opinion: After the Before From the Dishonorable Fifth Circuit

Non prisoner Lamell obtains a partial reversal in his favor from a 3-panel which capitulated from their earlier opinion. LIT investigates why.

There’s a Bunch of Federal Judges Departing from this Financial Services Case, But Not Allyson Ho

US District Court Judge Lynn Hughes Departs Involuntarily While One Unnamed 5th Cir. Judge recuses (we assume Jones) and Owen departs too.

U.S. District Court
SOUTHERN DISTRICT OF TEXAS (McAllen)
CIVIL DOCKET FOR CASE #: 7:22-cv-00010

Loza v. Select Portfolio Servicing, Inc. et al
Assigned to: Judge Randy Crane
Cause: 28:1332 Diversity-(Citizenship)
Date Filed: 01/06/2022
Jury Demand: None
Nature of Suit: 220 Real Property: Foreclosure
Jurisdiction: Diversity
Plaintiff
Julio E Loza represented by Julio E Loza
Sahadi Law
c/o James M. Sahadi
P.O. Box 720252
McAllen, TT 78504
956-287-3156
Email: jms@sahadilaw.com
PRO SE
V.
Defendant
Select Portfolio Servicing, Inc. represented by Eric Craig Mettenbrink
Hirsch and Westheimer
1415 Louisiana
36th Floor
Houston, TX 77002
713-223-5181
Fax: 713-223-9319
Email: emettenbrink@hirschwest.com
ATTORNEY TO BE NOTICEDMichael F Hord , Jr
Hirsch Westheimer PC
1415 Louisiana
36th Floor
Houston, TX 77002-2772
713-220-9182
Fax: 713-223-9319
Email: mhord@hirschwest.com
ATTORNEY TO BE NOTICED
Defendant
Deutsche Bank National Trust Company as Trustee, for Morgan Stanley ABS Capital 1 Inc. Trust 2005-HE7, Mortgage Pass-Through Certificates, Series 2005-HE7 represented by Eric Craig Mettenbrink
(See above for address)
ATTORNEY TO BE NOTICEDMichael F Hord , Jr
(See above for address)
ATTORNEY TO BE NOTICED

 

Date Filed # Docket Text
01/06/2022 1 NOTICE OF REMOVAL (Filing fee $ 402 receipt number 0541-27572841) filed by Deutsche Bank National Trust Company as Trustee, for Morgan Stanley ABS Capital 1 Inc. Trust 2005-HE7, Mortgage Pass-Through Certificates, Series 2005-HE7, Select Portfolio Servicing, Inc.. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit C-1, # 5 Exhibit C-2, # 6 Exhibit C-3, # 7 Exhibit C-4, # 8 Exhibit C-5, # 9 Exhibit C-6, # 10 Exhibit C-7, # 11 Exhibit C-8, # 12 Exhibit C-9, # 13 Exhibit C-10, # 14 Exhibit C-11, # 15 Exhibit C-12, # 16 Exhibit D, # 17 Civil Cover Sheet)(Hord, Michael) (Entered: 01/06/2022)
01/07/2022 2 ORDER for Initial Pretrial and Scheduling Conference and Order to Disclose Interested Persons. Initial Conference set for 2/8/2022 at 09:30 AM before Judge Randy Crane(by Judge Randy Crane) Parties notified.(kanelson, 7) (Entered: 01/07/2022)
01/07/2022 3 INITIAL DISCLOSURES by Deutsche Bank National Trust Company as Trustee, for Morgan Stanley ABS Capital 1 Inc. Trust 2005-HE7, Mortgage Pass-Through Certificates, Series 2005-HE7, Select Portfolio Servicing, Inc., filed.(Hord, Michael) (Entered: 01/07/2022)
Party Not Served: Dismissal With Prejudice is an Abuse of Discretion Sayeth Judge Stephen Higginson, CA5
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Laws In Texas is a blog about the Financial Crisis and how the banks and government are colluding against the citizens and homeowners of the State of Texas and relying on a system of #FakeDocs and post-crisis legal precedents, specially created by the Court of Appeals for the Fifth Circuit to foreclose on homeowners around this great State. We are not lawyers. We do not offer legal advice. We are citizens of the State of Texas who have spent a decade in the court system in Texas and have been party to during this period to the good, the bad and the very ugly.

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