Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca4-15-01720/USCOURTS-ca4-15-01720-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 15-1720

UNITED STATES ex rel. LYNN E. SZYMONIAK,

Plaintiff − Appellant,

and

STATES OF CALIFORNIA, DELAWARE, FLORIDA, HAWAII, ILLINOIS, 

INDIANA, MASSACHUSETTS, MINNESOTA, MONTANA, NEVADA, NEW 

HAMPSHIRE, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH 

CAROLINA, OKLAHOMA, RHODE ISLAND, VIRGINIA, DISTRICT OF 

COLUMBIA, AND THE CITIES OF CHICAGO AND NEW YORK, ex rel. 

LYNN E. SZYMONIAK,

Plaintiffs,

v.

AMERICAN HOME MORTGAGE SERVICING, INC; SAXON MORTGAGE 

SERVICES INC.; LENDER PROCESSING SERVICES INC; DOCX LLC; 

BANK OF NEW YORK MELLON CORPORATION; DEUTSCHE BANK 

NATIONAL TRUST COMPANY; DEUTSCHE BANK TRUST COMPANY 

AMERICAS; HSBC USA NATIONAL ASSOCIATION,

Defendants – Appellees,

and

CITIMORTGAGE INC, f/k/a Citi Residential Lending Inc., f/k/a AMC Mortgage 

Services Inc.; WELLS FARGO HOME MORTGAGE, d/b/a America's Servicing 

Company; BANK OF AMERICA CORPORATION, as successor in interest to 

Lasalle Bank; CITIBANK NATIONAL ASSOCIATION.; JP MORGAN CHASE

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BANK NATIONAL ASSOCIATION; US BANK NATIONAL ASSOCIATION; 

WELLS FARGO BANK NATIONAL ASSOCIATION,

Defendants,

v.

ROGERS TOWNSEND & THOMAS, PC,

Party−in−Interest.

Appeal from the United States District Court for the District of South Carolina, at Rock 

Hill. Joseph F. Anderson, Jr., Senior District Judge. (0:10−cv−01465−JFA)

Argued: December 9, 2016 Decided: February 16, 2017 

Before WILKINSON, NIEMEYER, and DIAZ, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Christopher P. Kenney, RICHARD A. HARPOOTLIAN, P.A., Columbia, 

South Carolina, for Appellant. Mary Gail Gearns, MORGAN, LEWIS & BOCKIUS 

LLP, New York, New York; Michael B. Kimberly, MAYER BROWN LLP, Washington, 

D.C.; Barbara Van Gelder, DICKSTEIN SHAPIRO LLP, Washington, D.C., for 

Appellees. ON BRIEF: Richard A. Harpootlian, RICHARD A. HARPOOTLIAN, P.A., 

Columbia, South Carolina, for Appellant. Christopher Jackson Allen, COZEN 

O’CONNOR, Washington, D.C., Fred O. Goldberg, BERGER SINGERMAN LLP, 

Miami, Florida, for Appellees Lender Processing Services, Inc. and DocX, LLC; Alice 

W. Parham Casey, WYCHE, P.A., Columbia, South Carolina, for Appellee Bank of New 

York Mellon Corporation; Michael S. Kraut, MORGAN, LEWIS & BOCKIUS LLP, 

New York, New York, for Appellees Deutsche Bank National Trust Company and 

Deutsche Bank Trust Company Americas; Gerard E. Wimberly, Jr., Gabriel Alan 

Crowson, New Orleans, Louisiana, Juston Michael O’Brien, MCGLINCHEY 

STAFFORD, PLLC, Baton Rouge, Louisiana, Melissa J. Copeland, SCHMIDT & 

COPELAND, LLC, Columbia, South Carolina, for Appellee American Home Mortgage 

Servicing, Inc.; B. Rush Smith III, Carmen Harper Thomas, NELSON MULLINS RILEY 

& SCARBOROUGH LLP, Columbia, South Carolina, Michael O. Ware, MAYER

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BROWN LLP, New York, New York, for Appellee HSBC Bank, USA, National 

Association.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

Lynn Szymoniak appeals the district court’s dismissal of her qui tam action 

seeking to recover damages and penalties from banks, mortgage-backed securities 

trustees, and servicers under the False Claims Act, 31 U.S.C. § 3729 et seq. Because the 

district court correctly found that Szymoniak failed to allege any false claims submitted 

by the Defendants or facts sufficient to create a reasonable inference that false claims 

necessarily were submitted, we affirm.

I.

A.

The False Claims Act (“FCA”) makes liable to the United States “any person 

who . . . knowingly presents, or causes to be presented, a false or fraudulent claim for 

payment or approval” to the government. 31 U.S.C. § 3729(a). Private persons may act 

as relators and bring a civil action for “a violation of section 3729 for the person and for 

the United States Government.” Id. § 3730(b).

Because claims under the Act sound in fraud, plaintiffs must satisfy the heightened 

pleading requirements of Federal Rule of Civil Procedure 9(b). United States ex rel.

Nathan v. Takeda Pharm. N. Am., Inc., 707 F.3d 451, 455–56 (4th Cir. 2013). Rule 9(b) 

requires that “[i]n alleging fraud or mistake, a party must state with particularity the 

circumstances constituting fraud or mistake. Malice, intent, knowledge, and other 

conditions of a person’s mind may be alleged generally.”

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We have interpreted this rule, as applied to FCA claims, to require relators to 

allege that defendants either caused specific false claims to be submitted or committed 

actions that “necessarily . . . led to the submission of false claims.” Nathan, 707 F.3d at 

457 (internal punctuation omitted).

B.

Lynn Szymoniak is a lawyer who, in 2008, defaulted on her payments on a 

mortgage loan for her home in Florida. While challenging the foreclosure of her home, 

Szymoniak claims that she discovered that several trustees and servicers of mortgagebacked-securities trusts—pooled mortgages which can be sold as investments—forged or 

lied about mortgage assignment documents and therefore lacked legal ownership over the 

mortgages they claimed to own.

In June 2010, Szymoniak filed suit in the U.S. District Court for the District of 

South Carolina as a relator under the False Claims Act. The complaint was filed under 

seal to allow the United States sixty days to intervene. Over the course of three years, the 

United States requested and obtained eight deadline extensions. After the United States 

informed the court that it did not intend to intervene, Szymoniak’s complaint was 

unsealed. In her third amended complaint, filed February 3, 2014, Szymoniak named 

fifteen Defendants: American Home Mortgage Servicing, Inc.; Saxon Mortgage 

Services, Inc.; Lender Processing Services, Inc.; DocX, LLC; CitiMortgage, Inc.; Wells 

Fargo Home Mortgage doing business as America’s Servicing Company; Bank of 

America Corporation; The Bank of New York Mellon Corporation; CitiBank, N.A.; 

Deutsche Bank National Trust Company; Deutsche Bank Trust Company Americas; 

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HSBC USA, N.A.; J.P. Morgan Chase Bank, N.A.; U.S. Bank, N.A.; and Wells Fargo 

Bank, N.A. (collectively, “Defendants”).

Szymoniak alleged that the Defendants defrauded the United States by: 

1) charging the government, as an investor in mortgage-backed-securities trusts 

containing fraudulent assignments, for trustee and custodial services; 2) selling to the 

government securities in mortgage-backed-securities trusts whose values were impaired 

due to missing or forged assignments; 3) using false assignments to apply for payments 

from the Department of Housing and Urban Development under the Federal Housing 

Administration’s mortgage insurance program; and 4) charging the government for the 

filing of falsified documents when foreclosing on federally insured mortgages.

Because Szymoniak based her complaint in part upon public disclosures and 

lacked independent knowledge of Defendants’ actions prior to March 23, 2010, the 

district court dismissed allegations related to false claims submitted before that date. 

Szymoniak later sought and received voluntary dismissal of her first and second 

claims against all Defendants. She also dismissed from the suit all but the following nine 

parties: American Home Mortgage Servicing, Inc.; Saxon Mortgage Services, Inc.; 

Lender Processing Services, Inc.; DocX, LLC; The Bank of New York Mellon 

Corporation; Deutsche Bank National Trust Company; Deutsche Bank Trust Company 

Americas; HSBC USA, N.A.; and U.S Bank, N.A. (collectively, “remaining 

Defendants”).

The remaining Defendants moved to dismiss the complaint for failure to state a 

claim upon which relief can be granted. Citing Nathan, the district court considered 

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whether Szymoniak alleged the submission of specific false claims or facts creating a 

reasonable inference that false claims necessarily were submitted.

Drawing all inferences in favor of Szymoniak, the district court found that, while 

her complaint “allege[d] an elaborate scheme,” it did “not provide facts to show that this 

scheme actually resulted in the submission of specific false claims,” and neither did the 

allegations create “a reasonable inference that false claims necessarily were submitted.” 

J.A. 710–11. The district court granted in full all remaining Defendants’ motions to 

dismiss except U.S. Bank’s motion, which was granted in part and denied in part because 

Szymoniak provided facts alleging that U.S. Bank charged the Department of Housing 

and Urban Development for the costs of filing fraudulent documents. After Szymoniak 

and U.S. Bank settled, the district court dismissed U.S. Bank as a party. Szymoniak

appeals the district court’s dismissal of the other remaining Defendants.

II.

We review de novo the district court’s order of dismissal for failure to state a 

claim under Federal Rule of Civil Procedure 12(b)(6). Nathan, 707 F.3d at 455 (citing 

Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999)). 

Szymoniak claims that the district court applied the wrong standard—that the 

court, rather than allowing her to allege a scheme necessarily resulting in the submission

of false claims, misread Nathan to require her to identify individual false claims. The 

correct standard from Nathan, Szymoniak argues, requires relators to identify no more 

than the “who, what, where, when, and how of a fraud.” Appellant’s Br. at 26.

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Szymoniak further contends that her allegation of an “elaborate scheme to create 

fraudulent foreclosure documents” meets this standard. Id. at 27–28 (internal quotation 

marks omitted). She also argues that, in the alternative, if Nathan did require the 

identification of specific false claims, “that decision should be reconsidered and 

overruled.” Id. at 34.

III.

Having thoroughly reviewed the record and considered the parties’ briefs and 

arguments, we conclude that it is Szymoniak, not the district court, who misreads Nathan. 

The district court’s thorough order properly applied Nathan’s rule requiring an FCA 

relator to identify specific false claims or allege a scheme that necessarily resulted in the 

submission of false claims. We decline Szymoniak’s invitation to revisit Nathan. World 

Fuel Servs. Trading v. Hebei Prince Shipping Co., 783 F.3d 507, 523–24 (4th Cir. 2015) 

(quoting Scotts Co. v. United Indus. Corp., 315 F.3d 264, 271 n.2 (4th Cir. 2002)) (“[A] 

panel of this court cannot overrule, explicitly or implicitly, the precedent set by a prior 

panel of this court. Only the Supreme Court or this court sitting en banc can do that.”).

Accordingly, we affirm on the reasoning of the district court.

AFFIRMED

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