Court Opinion

ID: 4910654
Source: CourtListenerOpinion
Date Created: 2021-09-14 00:00:33.027038+00
Date Added: 2024-06-11T08:13:18.771828
License: Public Domain

Case: 20-50051       Document: 00516011632            Page: 1      Date Filed: 09/13/2021

              United States Court of Appeals
                   for the Fifth Circuit                              United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                                                     September 13, 2021
                                     No. 20-50051                       Lyle W. Cayce
                                   Summary Calendar                          Clerk

   U.S. Bank National Association,
   as Legal Title Trustee for Truman 2016 SC6 Title Trust,

                                                                   Plaintiff—Appellee,

                                           versus

   Gloria Blizzard,

                                                               Defendant—Appellant.

                    Appeal from the United States District Court
                         for the Western District of Texas
                                 No. 1:18-CV-360

   Before Smith, Higginson, and Willett, Circuit Judges.
   Per Curiam:*
          Gloria Blizzard moves to appeal in forma pauperis (“IFP”) from a
   judgment dismissing her counterclaims under Federal Rule of Civil Proce-
   dure 12(b)(6) and granting summary judgment on the foreclosure claims of

          *
              Pursuant to 5th Circuit Rule 47.5, the court has determined that this opin-
   ion should not be published and is not precedent except under the limited circumstances
   set forth in 5th Circuit Rule 47.5.4.
Case: 20-50051      Document: 00516011632          Page: 2    Date Filed: 09/13/2021

                                    No. 20-50051

   U.S. Bank National Association (U.S. Bank) under Federal Rule of Civil Pro-
   cedure 56(a). The district court construed Blizzard’s initial federal pleading
   as a removal petition based on diversity jurisdiction under 28 U.S.C. § 1332
   rather than as a federal civil action under the Racketeer Influenced and Cor-
   rupt Organizations Act (“RICO”); 18 U.S.C. § 1964(c).
          Both parties contend that we should construe the action as an original
   federal action. U.S. Bank asserts there is no federal diversity jurisdiction if
   the action is deemed a removal because Blizzard, a Texas resident, could not
   properly remove the action from Texas state court under 28 U.S.C.
   § 1441(b)(2). But § 1441(b)(2) is a waivable procedural requirement, not a
   rule of subject-matter jurisdiction. See Adam v. Berry (In re 1994 Exxon Chem.
   Fire), 558 F.3d 378, 392−93 (5th Cir. 2009). Because U.S. Bank did not move
   to remand and invoke § 1441(b)(2), and because § 1332’s other requirements
   are met, the district court had jurisdiction. See Moss v. Princip, 913 F.3d 508,
   514 n.10 (5th Cir. 2019).
          There is some question about Blizzard’s financial eligibility to proceed
   IFP. But we do not address that issue, because she fails to identify any non-
   frivolous issue for appeal. See McGarrah v. Alford, 783 F.3d 584, 584 (5th Cir.
   2015); Carson v. Polley, 689 F.2d 562, 586 (5th Cir. 1982).
          Blizzard contends that the district court wrongly realigned the parties
   to make her the defendant rather than a plaintiff, thereby preventing her from
   developing her RICO claim. Given Blizzard's enigmatic initial pleading, the
   court did not abuse its discretion by realigning the parties to conform to the
   state action. See Lloyd v. Pendleton Land & Expl., Inc., 22 F.3d 623, 625 (5th
   Cir. 1994). Further, the realignment did not prevent Blizzard from raising
   any issue or asserting a RICO counterclaim.
          The district court correctly found that Blizzard’s conclusional asser-
   tions failed to state a plausible RICO counterclaim. See Ashcroft v. Iqbal,

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Case: 20-50051      Document: 00516011632          Page: 3    Date Filed: 09/13/2021

                                    No. 20-50051

   556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
   (2007). Neither the realignment nor the dismissal of the RICO counter-
   claims provides a nonfrivolous issue for appeal.
          Although the district court did not explicitly apply claim preclusion
   (res judicata) or issue preclusion (collateral estoppel), and U.S. Bank did not
   plead any preclusion doctrine, this court “may raise the issue of res judicata
   sua sponte as a means to affirm the district court decision.” Russell v. Sun-
   America Sec., Inc., 962 F.2d 1169, 1172 (5th Cir. 1992) (internal quotation
   marks and citation omitted); see United Home Rentals, Inc. v. Tex. Real Estate
   Comm’n, 716 F.2d 324, 330 (5th Cir. 1983); Am. Furniture Co. v. Int’l Accom-
   modations Supply, 721 F.2d 478, 482 (5th Cir. Unit A Mar. 1981). Issue pre-
   clusion or collateral estoppel provides that “if a litigant has fully and fairly
   litigated an issue and lost, then third parties unrelated to the original action
   can bar the litigant from re-litigating that same issue in a subsequent suit.”
   United States v. Mollier, 853 F.2d 1169, 1175 n.7 (5th Cir. 1988); see United
   States v. Shanbaum, 10 F.3d 305, 311 (5th Cir. 1994).
          In a foreclosure action in the Western District of Texas, Wilmington
   Trust, National Association (“Wilmington”), obtained a judgment allowing
   foreclosure on Blizzard's property. Wilmington assigned the foreclosure
   rights to U.S. Bank while the case was on appeal; we affirmed. See Wilming-
   ton Trust, N.A. v. Blizzard, 702 F. App’x 214, 215-18 (5th Cir. 2017). Conse-
   quently, Blizzard is precluded by collateral estoppel from relitigating any
   issue that was “identical to the one involved in the prior litigation,” that was
   “actually litigated in the prior” action, and that was “a critical and necessary
   part of the judgment in that earlier action.” Rabo Agrifinance, Inc. v. Terra
   XXI, Ltd., 583 F.3d 348, 353 (5th Cir. 2009). Blizzard is precluded from
   relitigating her contentions that she is not liable for the mortgage debt, that
   there were defects in the assignment of the foreclosure rights to Wilmington,
   and that foreclosure is otherwise not warranted.

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Case: 20-50051      Document: 00516011632           Page: 4    Date Filed: 09/13/2021

                                     No. 20-50051

          Although Blizzard is not necessarily precluded by the Wilmington
   judgment from challenging the transfer from Wilmington to U.S. Bank, she
   has no right, under Texas mortgage law, to attack the validity of any assign-
   ment of the note because there is no assertion that any assignment was void
   ab initio. See Morlock, L.L.C. v. Bank of New York, 448 S.W.3d 514, 517, 520-
   21 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) (citing Reinagel v.
   Deutsche Bank Nat. Tr. Co., 735 F.3d 220, 225–26 (5th Cir. 2013)); see also
   Bynane v. Bank of New York Mellon for CWMBS, Inc. Asset-Backed Certificates
   Series 2006-24, 866 F.3d 351, 360 (5th Cir. 2017); Ferguson v. Bank of New
   York Mellon Corp., 802 F.3d 777, 782 (5th Cir. 2015).
          Moreover, Blizzard has offered only vague, conclusional, and irrele-
   vant assertions of fraud and other presumptions and suspicions of ill-defined
   irregularities that are inadequate to state any plausible claim or show a genu-
   inely contested issue of fact that is material to the conclusion that the defen-
   dants are entitled to judgment as a matter of law. See Fed. R. Civ. P. 9(b)
   (requiring a party to “state with particularity the circumstances constituting
   fraud”); Fed. R. Civ. P. 12(b); Fed. R. Civ. P. 56(a); Twombly,
   550 U.S. at 555; HSBC Bank USA, N.A. as Tr. for Merrill Lynch Mortg. Loan
   v. Crum, 907 F.3d 199, 202 (5th Cir. 2018) (noting the inadequacy of conclu-
   sional assertions); Morrison v. City of Baton Rouge, 761 F.2d 242, 244 (5th Cir.
   1985) (holding that conclusional assertions, without reference to specific
   facts or evidence, are insufficient to state a claim of a conspiracy).
          Because Blizzard shows no nonfrivolous issue for appeal, her IFP
   motion is denied, and her appeal is dismissed as frivolous. See McGarrah,
   783 F.3d at 584; 5th Cir. R. 42.2. Blizzard is warned that frivolous actions
   or appeals will invite sanctions, including monetary sanctions and limits on
   her access to this court and any court subject to this court's jurisdiction.

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