UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

BERNICE MUHAMMAD, )

)

Plaintiff, )

)

vs. ) 1:10-CV-00096-SC

)

OPTION ONE MORTGAGE CORP., )

et al., )

)

Defendants. )

MEMORANDUM OF OPINION

I. Introduction.

The Court has for consideration motions to dismiss filed by defendants

Option One Mortgage Corporation (“Option One Mortgage”) (Doc. 60); Ada

Services Corporation, formerly known as H&R Block Mortgage Corporation

(“H&R Block Mortgage”) (Doc. 58); Merrill Lynch Mortgage Investors, Inc.,

incorrectly named in the second Amended Complaint as “Merrill Lynch

Mortgage Loan Investore, Inc.” (Doc. 56); Bank of America, N.A., incorrectly

named as “Bank of American for Merrill Lynch Mortgage Loan Investor, Inc.,”

“Mortgage Loan Asset-Backed Certificates, Series 2002 HEI,” “Bank of

America for Mortgage Loan Asset-Backed Certificates, Series 2002 HEI,” and

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“Bank of America for Merrill Lynch” (Doc. 56); Daniel O’Brien, incorrectly

named as “U.S. Bankruptcy Trustee, Danny O’Brian” (Doc. 48); Prince,

McKean, McKenna & Broughton, LLC (Doc. 47); American Home Mortgage

Servicing, Inc. (Doc. 52); HSBC Bank USA, National Association, as Trustee for

Merrill Lynch Mortgage Investors, Inc., Mortgage Loan Asset-Backed

Certificates, Series 2002-HE1 Trust, incorrectly named as “Bank of AmericaMerrill Lynch,” “HSBC Bank USA, N.A.,” “Merrill Lynch Mortgage Loan

Investors, Inc.,” and “Mortgage Loan Asset-Backed Certificates, Series 2002

HEI” (Doc. 52); James H. Greer (Doc. 55); Phillip M. Leslie (Docs. 62, 66);

Johnson & Freedman, LLC (Doc. 65); Dan Feinstein (Doc. 65); Barry Friedman

(Doc. 75); U.S. District Judge William H. Steele (Doc. 76); U.S. District Judge

Kristi K. DuBose (Doc. 76); U.S. Chief Bankruptcy Judge William S. Shulman

(Doc. 76); U.S. Magistrate Judge William E. Cassady (Doc. 76); and U.S.

Magistrate Judge Katherine P. Nelson (Doc. 76). A Suggestion of Death has

been filed, notifying the Court of the death of the remaining defendant,

Scott J. Humphrey. (Doc. 74.)

1

Plaintiff names Gregory M. Deitsch in the style of the Second Amended 1

Complaint. However, Plaintiff does not make any factual allegations against Mr. Deitsch

in the body of the complaint, nor has she made any effort to effect service on Mr.

Deitsch. Accordingly, Plaintiff’s claims against Mr. Deitsch will be dismissed for failure

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Plaintiff Bernice Muhammad, proceeding pro se, sued the defendants

for violations of the Racketeer Influenced and Corrupt Organizations Act

(“RICO”), 18 U.S.C. §§ 1961-1968; 11 U.S.C. § 362; 42 U.S.C. § 1985(3); and

42 U.S.C. § 1986. (Doc. 44.) Specifically, Plaintiff contends that

2

Defendants engaged in a conspiracy to defraud her of her home through

to state a claim.

Plaintiff also references violations of 18 U.S.C. § 1692; 15 U.S.C. § 1641; and 18

2

U.S.C. § 152 in the Second Amended Complaint. (Doc. 44 at 6.) To the extent these

claims are actionable, they were not included in separate counts. “Federal Rule of Civil

Procedure 8(a)(2) requires that a pleading contain a ‘short and plain statement of the

claim’ showing that the pleader is entitled to relief.” Washington v. Bauer, 149 Fed.

Appx. 867, 869 (11th Cir. 2005). “Further, Federal Rule of Civil Procedure 10(b) requires

that the averments of a claim ‘shall be made in numbered paragraphs, the contents of

each of which shall be limited as far as practicable to a statement of a single set of

circumstances . . . and each claim found upon a separate transaction or occurrence . .

. shall be stated in a separate count.’” Id. (quoting Fed. R. Civ. P. 10(b)) (emphasis

added). While courts “do and should show a leniency to pro se litigants not enjoyed by

those with the benefit of a legal education,” “this leniency does not give a court license

to serve as defacto counsel for a party . . . or to rewrite an otherwise deficient pleading

in order to sustain an action.” GJR Invs., Inc. v. County of Escambia, Florida, 132 F.3d

1359, 1369 (11th Cir. 1998) (internal citations omitted). Even pro se complaints “must

comply with the procedural rules governing the proper form of pleadings.” Bauer, Fed.

Appx. at 869 (citing McNeil v. United States, 508 U.S. 106, 113 (1993)). Moreover, Fed.

R. Civ. P. 10(b) was explained to the plaintiff in the Court’s March 24th Order. (Doc.

22.)

Plaintiff’s failure to comply with Fed. R. Civ. P. 10(b) in particular makes it very

difficult for this Court to determine exactly what authority is being relied upon in this

action, which defendants are being sued under which laws, and which facts support each

of Plaintiff’s claims. Citing statutes in the initial portion of a complaint is not sufficient

to state a claim upon which relief can be granted. Therefore, if Plaintiff intended to

assert claims under 18 U.S.C. § 1692; 15 U.S.C. § 1641; 18 U.S.C. § 152; or any other

statutes referenced in the Second Amended Complaint that are not set forth in separate

counts, those claims are dismissed.

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assorted violations of the law and judicial process.

In response to Plaintiff’s motion for leave to file an amended complaint

on March 19, 2010 (Doc. 17), the Court issued an Order generally

summarizing rules of civil procedure and the factual requirements for a

well-pled complaint (Doc. 22). Plaintiff was also directed to submit a

separate RICO case statement or include such information in her proposed

amended complaint. (Doc. 22 at 3-7.) Acknowledging that Plaintiff made

an attempt to comply with the requirements set forth in the Court’s Order,

the Court allowed Plaintiff’s subsequent proposal to be filed as a Second

Amended Complaint (Doc. 44) on April 16, 2010. However, the Court noted

that it should not be inferred from its ruling that the Second Amended

Complaint complied with the Federal Rules of Civil Procedure and/or was

sufficiently pled to survive motions to dismiss. (Doc. 43.)

Defendant’s motions to dismiss the Second Amended Complaint have

been fully briefed and are now ripe for decision. Upon full consideration,

Defendants’ motions to dismiss will be granted in all respects.

II. Standard.

A defendant may move to dismiss a complaint pursuant to Federal Rule

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of Civil Procedure 12(b)(6) if the plaintiff has failed to state a claim upon

which relief may be granted. “The standard of review for a motion to dismiss

is the same for the appellate court as it [is] for the trial court.” Stephens

v. Dep’t of Health & Human Servs., 901 F.2d 1571, 1573 (11th Cir. 1990).

“When considering a motion to dismiss, all facts set forth in the plaintiff’s

complaint ‘are to be accepted as true and the court limits its consideration

to the pleadings and exhibits attached thereto.’” Grossman v. Nationsbank,

N.A., 225 F.3d 1228, 1231 (11th Cir. 2000)(quoting GSW, Inc. v. Long County,

999 F.2d 1508, 1510 (11th Cir. 1993)). All “reasonable inferences” are drawn

in favor of the plaintiff. St. George v. Pinellas County, 285 F.3d 1334, 1337

(11th Cir. 2002).

To survive a 12(b)(6) motion to dismiss for failure to state a claim, the

complaint “does not need detailed factual allegations”; however, the

“plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’

requires more than labels and conclusions, and a formulaic recitation of the

elements of a cause of action will not do. Factual allegations must be

enough to raise a right to relief above the speculative level, on the

assumption that all the allegations in the complaint are true (even if

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doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007)(internal citations omitted). The plaintiff must plead “enough facts

3

to state a claim that is plausible on its face.” Id. at 570. Unless a plaintiff

has “nudged [his] claims across the line from conceivable to plausible,” the

complaint “must be dismissed.” Id.

“[U]nsupported conclusions of law or of mixed fact and law have long

been recognized not to prevent a Rule 12(b)(6) dismissal.” Dalrymple v.

Reno, 334 F.3d 991, 996 (11th Cir. 2003) (quoting Marsh v. Butler County,

Ala., 268 F.3d 1014, 1036 n.16 (11th Cir. 2001)). And, “where the wellpleaded facts do not permit the court to infer more than the mere possibility

of misconduct, the complaint has alleged—but it has not ‘show[n]’—that the

pleader is entitled to relief.” Ashcroft v. Iqbal, --- U.S. ----, 129 S. Ct. 1937,

1950 (2009) (quoting Fed. R. Civ. P. 8(a)(2)). The U.S. Supreme Court has

suggested that courts adopt a “two-pronged approach” when considering

In Bell Atlantic Corp. v. Twombly, the U.S. Supreme Court abrogated the 3

oft-cited standard that “a complaint should not be dismissed for failure to state a claim

unless it appears beyond doubt that the plaintiff can prove no set of facts in support of

his claim which would entitle him to relief” set forth in Conley v. Gibson, 355 U.S. 41

(1957). Bell Atl. Corp., 550 U.S. at 560-63. The Supreme Court stated that the “no set

of facts” standard “is best forgotten as an incomplete, negative gloss on an accepted

pleading standard: once a claim has been stated adequately, it may be supported by

showing any set of facts consistent with the allegations in the complaint.” Id. at 563. 

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motions to dismiss: “1) eliminate any allegations in the complaint that are

merely legal conclusions; and 2) where there are well-pleaded factual

allegations, ‘assume their veracity and then determine whether they

plausibly give rise to an entitlement to relief.’” American Dental Ass’n v.

Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 129 S. Ct.

at 1950). Importantly, “courts may infer from the factual allegations in the

complaint ‘obvious alternative explanation[s],’ which suggest lawful conduct

rather than the unlawful conduct the plaintiff would ask the court to infer.”

Id. (quoting Iqbal, 129 S. Ct. at 1951-52).

However, “[a] complaint may not be dismissed because the plaintiff’s

claims do not support the legal theory he relies upon since the court must

determine if the allegations provide for relief on any possible theory.”

Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364 (11th Cir.

1997). Moreover, a court must be particularly liberal in interpreting the

“inartful pleading” of a pro se plaintiff. See Hughes v. Rowe, 449 U.S. 5, 9

(1980).

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III. Analysis.

A. RICO Claims.

In the Second Amended Complaint, Plaintiff contends that Defendants

violated sections 1962(a)-(d) of the RICO statutes, and seeks damages

pursuant to the civil remedies provision, 18 U.S.C. § 1964(c). “Section 1962

of Title 18 of the United States Code criminalizes the following activities:

(a) It shall be unlawful for any person who has

received any income derived, directly or indirectly,

from a pattern of racketeering activity . . . to use or

invest, directly or indirectly, any part of such

income, or the proceeds of such income, in

acquisition of any interest in, or the establishment or

operation of, any enterprise which is engaged in, or

the activities of which affect, interstate or foreign

commerce.

(b) It shall be unlawful for any person through a

pattern of racketeering activity . . . to acquire or

maintain, directly or indirectly, any interest in or

control of any enterprise which is engaged in, or the

activities of which affect, interstate or foreign

commerce.

(c) It shall be unlawful for any person employed by or

associated with any enterprise engaged in, or the

activities of which affect, interstate or foreign

commerce, to conduct or participate, directly or

indirectly, in the conduct of such enterprise’s affairs

through a pattern of racketeering activity.

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(d) It shall be unlawful for any person to conspire to

violate any of the provisions of subsection (a), (b), or

(c) of this section.

Johnson Enters. of Jacksonville, Inc. v. FPL Group, Inc., 162 F.3d 1290, 1316

(11th Cir. 1998).

1. 18 U.S.C. §§ 1962(a), 1962(b), and 1962(c).

Subsections (a), (b), and (c) of section 1962 “require proof of a

‘pattern of racketeering activity,’ which is defined in 18 U.S.C. § 1961(5) as

‘at least two acts of racketeering activity.’” Id. “Racketeering activity”

includes “any act ‘chargeable’ under several generically described state

criminal laws, any act ‘indictable’ under numerous specific federal criminal

provisions, including mail and wire fraud, and any ‘offense’ involving

bankruptcy or securities fraud or drug-related activities that is ‘punishable’

under federal law.” Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 481-

82 (1985). “In order to prove a pattern of racketeering in a civil or criminal

RICO case, a plaintiff must show at least two racketeering predicates that

are related, and that they amount to or pose a threat of continued criminal

activity.” Cigna Corp., 605 F.3d at 1290-91 (citing H.J. Inc. v. Nw. Bell Tel.

Co., 492 U.S. 229, 240 (1989)). “A party alleging a RICO violation may

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demonstrate continuity over a closed period by proving a series of related

predicates extending over a substantial period of time.” Id. at 1291 (quoting

H.J. Inc., 492 U.S. at 242).

In the Second Amended Complaint, Plaintiff’s contentions include the

following:

-H&R Block Mortgage and Option One Mortgage violated

bankruptcy law 11 U.S.C. § 362 by incorrectly claiming in a letter

that they had been granted relief from an automatic bankruptcy

stay (Doc. 44 at 7);

4

-Attorney James Greer represented H&R Block Mortgage and

Option One Mortgage when they made the assertion regarding

relief from the stay (Id. at 7-8);

-Option One Mortgage filed an incorrect proof of claim in

November 2004, because it did not credit Plaintiff with certain

payments (Id. at 9);

-Attorney Dan Feinstein represented H&R Block Mortgage and

Option One Mortgage when they filed the incorrect proof of claim

(Id. at 10);

Plaintiff attaches an Order by U.S. Chief Bankruptcy Judge William Shulman,

4

which conditionally denies Option One Mortgage’s motion for relief from stay, but

provides:

If the debtor fails to pay a complete monthly mortgage

payment in bankable funds to Option One beginning in August

2003 by the 15th day of each month, Option One shall mail,

by regular mail, a written (15) fifteen day notice of default

to the debtor and debtor[’]s attorney at their addresses

listed in the petition. If the default is not cured within

fifteen (15) days of the letter, the automatic stay provided

under 11 U.S.C. § 362 will terminate automatically without

further notice or Order of this court.

(Doc. 44, Ex. A at 2.)

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-Plaintiff’s bankruptcy attorney, Phillip Leslie, “act[ed]

contrary” to Plaintiff’s interest by “ignoring significant aspects

of [the] proper approach” to Option One Mortgage’s alleged

violations, and “walk[ing] away from Plaintiff’s case when no

other attorney would take the case (Id. at 12-13);

-U.S. Bankruptcy Trustee Daniel O’Brien allowed the alleged

violations to take place (Id. at 14);

-U.S. Chief Bankruptcy Judge William Shulman allowed the

alleged violations to take place and facilitated the alleged

violations by misstating the law in his orders (Id. at 15-16);

-U.S. District Judge William Steele, U.S. District Judge Kristi

DuBose, U.S. Magistrate Judge William Cassady, and U.S.

Magistrate Judge Katherine Nelson “looked the other way” and

“refus[ed] to prevent” the alleged violations (Id. at 23).

Assuming these allegations are true, they do not state a plausible claim

against any of the defendants for any of the predicate acts that constitute

“racketeering activity,” let alone a “pattern of racketeering activity.”

Plaintiff has not “allege[d] facts that support each statutory element of a

violation of one of the state or federal laws described in 18 U.S.C. §

1961(1).” Raney v. Allstate Ins. Co., 370 F.3d 1086, 1087 (11th Cir. 2004.)

And, while Plaintiff makes general allegations of “fraud” against various

defendants in her Second Amended Complaint and legal memoranda, the

facts alleged do not meet the Twombly and Iqbal plausibility standard, or

the heightened pleading standard required for claims of fraud or mistake.

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

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circumstances constituting fraud or mistake.” Cigna Corp., 605 F.3d at

1291. “[P]ursuant to [Federal Rule of Civil Procedure] 9(b), a plaintiff must

allege: ‘(1) the precise statements, documents, or misrepresentations made;

(2) the time, place, and person responsible for the statement; (3) the

content and manner in which these statements misled the Plaintiffs; and (4)

what the defendants gained by the alleged fraud.’” Id. (quoting Brooks v.

Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1380-81 (11th Cir.

1997)). “The plaintiff must [also] allege facts with respect to each

defendant’s participation in the fraud.” Id. (citing Brooks, 116 F.3d at 1381)

(emphasis added). Plaintiff’s allegations of “fraud” are “labels and

conclusion,” insufficient to survive a motion to dismiss her claims under 18

U.S.C. §§ 1962(a), 1962(b), and 1962(c). Twombly, 550 U.S. at 555.

2. 18 U.S.C. §§ 1962(d).

“Section 1962(d) of the RICO statutes makes it illegal for anyone to

conspire to violate one of the substantive provisions of RICO.” Cigna Corp.,

605 F.3d at 1293. “A plaintiff can establish a RICO conspiracy claim in one

of two ways: (1) by showing that the defendant agreed to the overall

objective of the conspiracy; or (2) by showing that the defendant agreed to

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commit two predicate acts.” Id. (quoting Republic of Panama v. BCCI

Holdings (Luxembourg) S.A., 119 F.3d 935, 950 (11th Cir. 1997)). “A

plaintiff need not offer direct evidence of a RICO agreement; the existence

of conspiracy ‘may be inferred from the conduct of the participants.’” Id.

(citing Republic of Panama, 119 F.3d at 950). When Plaintiff’s conclusory

allegations of “conspiracy” and “cooperation” are set aside, as instructed in

Iqbal, the facts do not support an inference of any agreement by any

defendant (1) to an overall objective of conspiracy or (2) to commit two

predicate acts. Plaintiff’s RICO conspiracy claim will also be dismissed.

B. 11 U.S.C. § 362.

To the extent Plaintiff’s Second Amended Complaint seeks to assert a

separate claim against Defendants under 11 U.S.C. § 362 for willful violation

of a bankruptcy stay, that claim is not properly before this Court. By

General Order on July 20, 1984, the United States District Court for the

Southern District of Alabama referred all proceedings arising under Title 11

to the bankruptcy judges of the district. Therefore, all proceedings arising

under Title 11 must be filed with the Bankruptcy Court.

However, even if Plaintiff’s Title 11 claim was properly before this

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Court, it would be dismissed. In order to recover damages under § 362, a

plaintiff must show: “(1) a violation of the automatic stay has occurred; (2)

the violation was willful; and (3) the willful violation has caused injury to the

debtor[.]” In re Lightfoot, 399 B.R. 141, 148 (Bankr. E.D. Pa. 2008); see

also, e.g., In re Wiley, 315 B.R. 682 (Bankr. E.D. La. 2004); Bell v. SanfordCorbitt-Bruker, Inc., 1987 WL 60286 (S.D. Ga. 1987). Assuming Plaintiff has

sufficiently alleged an actual violation of a bankruptcy stay by H&R Block

Mortgage and Option One Mortgage, she has not alleged any facts from which

a court can infer the violation was willful or caused her any injury.

Furthermore, there are no facts supporting a plausible claim that any other

defendants in this action violated a bankruptcy stay.

C. 42 U.S.C. § 1985(3).

Plaintiff’s claim under 42 U.S.C. § 1985(3) also fails. In order to state

a claim under § 1985(3):

a plaintiff must allege: (1) defendants engaged in a

conspiracy; (2) the conspiracy’s purpose was to

directly or indirectly deprive a protected person or

class the equal protection of the laws, or equal

privileges and immunities under the laws; (3) a

conspirator committed an act to further the

conspiracy; and (4) as a result, the plaintiff suffered

injury to either his person or his property, or was

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deprived of a right or privilege of a citizen of the

United States.

Jimenez v. Wellstar Health System, 596 F.3d 1304, 1312 (11th Cir. 2010).

Plaintiff has not alleged any facts from which an inference can be made that

any defendants agreed to deprive Plaintiff of equal protection of the laws,

or equal privileges and immunities under the laws. There are no facts to

support an allegation that Defendants acted against Plaintiff because she was

a member of a protected class. Lucero v. Operation Rescue of Birmingham,

954 F.2d 624, 628 (11th Cir. 1992). Because Plaintiff has not alleged any

facts that support a plausible claim for civil conspiracy, her § 1985(3) claim

will be dismissed.

D. 42 U.S.C. § 1986.

Finally, it appears that Plaintiff contends Defendants have violated 42

U.S.C. § 1986. “Section 1986 provides a cause of action against anyone who

has ‘knowledge that any of the wrongs conspired to be done, and mentioned

in section 1985 of this title, are about to be committed, and having the

power to prevent or aid in preventing the commission of the same, neglects

or refuses so to do.’” Park v. City of Atlanta, 120 F.3d 1157, 1159 (11th Cir.

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1997). “Section 1986 claims are therefore derivative of § 1985 violations.”

Id. at 1159-60. Section 1986 “requires a violation of § 1985,” though the

individuals held liable under § 1986 do not have to be involved in the § 1985

conspiracy. Id. at 1160. Because Plaintiff has not alleged sufficient facts to

support an inference that a § 1985 violation occurred, let alone that any of

the defendants had knowledge of such a conspiracy, her § 1986 claim will

also be dismissed.

IV. Conclusion.

For the reasons outlined above, Plaintiff’s claims against all named

defendants are due to be dismissed for failure to state a claim. A separate

order will be entered.

Done this 6th day of July 2010.

____________

L. SCOTT COOGLER

UNITED STATES DISTRICT JUDGE

139297

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