Court Opinion

ID: 4300771
Source: CourtListenerOpinion
Date Created: 2018-08-03 14:00:25.731763+00
Date Added: 2024-06-11T09:36:43.767866
License: Public Domain

Case: 16-16685   Date Filed: 08/03/2018   Page: 1 of 51

                                                               [PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                     ________________________

                            No. 16-16685
                      ________________________

                 D.C. Docket No. 1:16-cv-00062-CG-M

KARUN N. JACKSON,
URSULA D. JACKSON,

                                            Plaintiffs – Appellants,

versus

BANK OF AMERICA, N.A.,

                                            Defendant,

SPECIALIZED LOAN SERVICING LLC,
BANK OF NEW YORK MELLON,
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,

                                        Defendants – Appellees.
                      ________________________

               Appeal from the United States District Court
                  for the Southern District of Alabama
                      ________________________

                            (August 3, 2018)
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Before TJOFLAT and JULIE CARNES, Circuit Judges, and BLOOM, * District
Judge.

TJOFLAT, Circuit Judge:

        This appeal involves an abuse of process engineered to delay or prevent

execution of a foreclosure judgment on a residence and the consequent eviction of

its occupants. The homeowners’ counsel effectuated this scheme by filing a multi-

count, incomprehensible complaint that flouted the Federal Rules of Civil

Procedure and this Circuit’s well-established precedent. The District Court gave

counsel an opportunity to file an amended complaint that comported with the

requirements of the Federal Rules of Civil Procedure. 1 Counsel amended the

complaint. He made no effort to correct its deficiencies, however, choosing to

stand on his deficient pleading. The District Court nonetheless accepted the

amended complaint, going to great lengths to sort it out.

        After spending fifty-four pages unpacking the pleading just to determine

whether the amended complaint presented a cognizable basis for relief, the District

Court dismissed the case with prejudice for failure to state a claim. We affirm the

        *
          Honorable Beth Bloom, United States District Judge for the Southern District of
Florida, sitting by designation.
        1
          Federal Rule of Civil Procedure 8 requires a complaint to contain “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). As
interpreted by the Supreme Court, this requirement means a complaint must “contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974 (2007)). “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.
                                                   2
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District Court’s judgment, but we do so on an alternative ground. By attempting to

prosecute an incomprehensible pleading to judgment, the plaintiffs obstructed the

due administration of justice in the District Court. And they are doing the same

here in urging this Court to uphold the sufficiency of their amended complaint.

                                              I.

                                              A.

      The facts of this case demonstrate the scheme’s operation. Karun and

Ursula Jackson, represented by Kenneth Lay, a Birmingham, Alabama lawyer, 2

brought this action against Bank of America, N.A., Specialized Loan Servicing

LLC (“SLS”), Bank of New York Mellon (“Mellon”), and Mortgage Electronic

Registration Systems, Inc. (“MERS”) in the Circuit Court of Baldwin County,

Alabama on January 12, 2016, one day after the foreclosure sale of their residence.

The Jacksons’ complaint alleged fourteen causes of action under Alabama and

federal law in separate counts, spanned twenty pages, and contained 109

paragraphs of allegations. The causes of action were not defendant-specific, all

were based on all of the complaint’s twenty-four introductory paragraphs, and all

fourteen causes of action incorporated all previous allegations. This made it

impossible for any Defendant to reasonably frame an answer. The crux of the

      2
          Mr. Lay is a partner in Hood & Lay, LLC.
                                              3
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complaint appears to be that Defendants 3 classified their home mortgage as in

default, accelerated their loan, turned over their account for foreclosure, and

reported the foreclosure to the credit reporting agencies without any legitimate

basis for doing so.

       Specifically, the Jacksons alleged that they purchased a house in Daphne,

Alabama on August 28, 2006. To finance the purchase, they executed a mortgage

and a promissory note with First Residential Mortgage Network, Inc. for

$139,040.00. As specified in the mortgage agreement, MERS acted as the servicer

for the loan. First Residential later sold and assigned the note and mortgage to

Mellon.

       The Jacksons further alleged that from the date they bought the house until

September 2012, Defendants accepted and cashed their monthly mortgage

payments, but did not apply the payments to the Jacksons’ account. Then, in

November 2012, Defendants rejected a check from the plaintiffs without

explanation. The Jacksons alleged that when they called to find out what

happened, Defendants told them that “they were in default for failure to make

payments, but could not explain why they were allegedly in default.” According to

       3
          In their complaint, the Jacksons referred to all Defendants collectively, rather than
specifying which Defendant(s) committed which alleged wrongful act(s). Accordingly, we too
refer to Defendants collectively for purposes of the recitation of facts, except when the complaint
referenced a specific Defendant.
                                                4
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the Jacksons, Defendants further announced that they would no longer accept any

mortgage payments and that their mortgage would be turned over for foreclosure.

      The complaint avers that, in accordance with this statement, Defendants

returned all of the monthly payments made from November 2012 to January 2014.

Then, on June 12, 2015, Defendants accelerated the mortgage and demanded

payment. On November 8, 2015, Defendants initiated foreclosure proceedings in

Baldwin County, Alabama. They published notice of the default and foreclosure

sale in the local newspaper in both November and December of 2015. The

foreclosure sale occurred on January 11, 2016, and the property was sold to

Mellon, the highest bidder at the sale. The foreclosure was reported to the national

credit bureaus.

      Based on these allegations, the Jacksons presented fourteen counts: (1)

negligence; (2) wantonness; (3) unjust enrichment; (4) wrongful foreclosure; (5)

slander of title; (6) breach of contract; (7) fraud; (8) false light; (9) defamation,

libel, and slander; (10) violations of the Truth in Lending Act; (11) violations of

the Real Estate Settlement Procedures Act; (12) violations of the Fair Credit

Reporting Act; (13) violations of the Fair Debt Collection Practices Act; and a (14)

claim for declaratory relief. According to the complaint, Defendants’ conduct

caused the Jacksons “to have negative credit reports” and to be “denied

                                            5
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homeowners insurance, held up to public ridicule or shame, humiliated, made to

suffer physically and mentally, and endure anguish.”

      The Jacksons sought “(1) [a]n Order declaring that they are not in default of

their mortgage agreement and declaring the notice of default is null and void,” “(2)

[a]n order declaring that Defendants have no right or authority to foreclose on the

Jacksons’ property,” “(3) [a]n Order prohibiting Defendants from foreclosing on

the Jacksons’ property,” and (4) compensatory and punitive damages for the

various forms of financial, emotional, and defamatory harm alleged. The request

for declaratory and injunctive relief, which if granted would undo the foreclosure

sale and restore the Jacksons’ mortgage on the home, made the suit the functional

equivalent of a collateral attack on the validity of the foreclosure proceedings.

                                          B.

      On February 12, 2016, Defendants removed the case to federal court

pursuant to 28 U.S.C. § 1331. On February 19, all Defendants moved for a more

definite statement pursuant to Federal Rule of Civil Procedure 12(e), with Bank of

America filing its own, separate motion and the other Defendants filing their

motion jointly. Defendants identified three problems with the complaint: first, the

complaint was a shotgun pleading that incorporated all of its factual allegations

into each count; second, the complaint failed to identify the specific Defendant(s)

to which each count pertained; and third, the complaint “omit[ted] key facts such

                                          6
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as relevant dates and the particular nature of the violations that [Defendants]

allegedly committed.” The motion was referred to a Magistrate Judge on February

22. The Jacksons responded that they did not oppose the motion and were willing

to file an amended complaint, but moved the District Court for twenty-one days to

prepare a revised pleading. The District Court granted the motion, giving the

Jacksons twenty-one days to file an amended complaint.

      On March 29, 2016, the day the amended complaint was due, Mr. Lay

moved the District Court for an extension of the deadline to file the revised

pleading. Mr. Lay stated that he had been out of the office due to illness and asked

for seven more days. The Magistrate Judge, on referral, granted the motion and

gave the Jacksons until April 5 to file their amended complaint. On April 10, five

days after the expiration of the extended deadline, and without having filed the

amended complaint, Mr. Lay requested another extension. This time, he stated that

he had been out of the office due to illness and a death in his family and asked for

an additional seven days. Defendants did not oppose his request. The Magistrate

Judge granted the motion and extended the deadline to April 12.

      The Jacksons filed their amended complaint on April 12. The amended

complaint swelled to twenty-three pages and 123 paragraphs, made minor changes

                                          7
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to a number of the factual allegations, added two new counts, 4 and listed one or

more Defendants in parentheses under the heading of each count—presumably to

clarify which count(s) applied to which Defendant(s). Counts (1) through (14)

alleged the same injuries and requested the same forms of relief as those contained

in the initial complaint.

       The amended complaint was, like its predecessor, a shotgun pleading: it

incorporated all of the factual allegations into each count without delineating

which allegations pertained to each count. On April 29, Bank of America

answered the amended complaint, denying its purported wrongdoing and asserting

as a sixth affirmative defense that the amended complaint failed to state a claim for

relief. The other Defendants moved collectively to dismiss the complaint on the

same failure-to-state ground. The District Court ordered the Jacksons to respond to

the motion to dismiss by May 13. 5 On May 13, the day the response was due, Mr.

Lay moved for a seven-day extension to the deadline to file the Jacksons’ response.

As the reason for the extension request, he stated that he was out of town for

hearings in other counties. The motion was unopposed. Accordingly, the

       4
         The amended complaint included all of the same counts contained in the original
complaint and added two additional counts: (15) violations of the Telephone Consumer
Protection Act and (16) violations of the Equal Credit Opportunity Act.
       5
          The Court’s order should have required the Jacksons to respond to Bank of America’s
sixth affirmative defense, which was the functional equivalent of the other Defendants’ motion to
dismiss. Because it did not, the Magistrate Judge, in his Report and Recommendation, did not
pass on the legal sufficiency of the claims against Bank of America.
                                               8
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Magistrate Judge granted the motion and gave the Jacksons until May 20 to

respond.

       The Jacksons responded to the motion to dismiss on May 20, 2016. On May

23, the District Court referred the motion to dismiss to the Magistrate Judge for a

report and recommendation. On July 19, the Magistrate Judge issued his Report

and Recommendation (“R&R”), which recommended dismissal of the amended

complaint as against MERS, SLS, and Mellon for failure to state a claim. The

R&R comprehensively analyzed each of the Jacksons’ sixteen causes of action and

determined that none made out a legally cognizable claim. 6 The Jacksons objected

to the R&R on the ground that their claims were sufficient.

       On September 2, just before the District Court was set to rule on the

Jacksons’ objections to the R&R, the Jacksons moved the Court for leave to amend

their amended complaint, submitting with their motion a proposed Second

       6
         In referring the motion to dismiss to the Magistrate Judge, the District Court
determined, albeit tacitly, that the amended complaint was sufficiently comprehensible to enable
the Magistrate Judge to identify with confidence the Jacksons’ causes of action with respect to
each named Defendant and to determine whether any of the sixteen counts stated a claim for
relief. The Magistrate Judge, lacking the Article III dispositive power of a district judge, was
therefore precluded from striking the amended complaint and ordering the Jacksons to file a
complaint that comported, at bottom, with Rule 8(a) and the Supreme Court’s Iqbal decision.
See supra note 1. Instead, the Magistrate Judge had to give the amended complaint a reading
most favorable to the Jacksons, i.e., effectively redraft its counts, and then decide whether any of
them stated a claim for relief.
        The amended complaint is incomprehensible. Were we to parse the amended complaint
in search of a potentially valid claim, we would give the appearance of lawyering for one side of
the controversy and, in the process, cast our impartiality in doubt.

                                                 9
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Amended Complaint. On September 7, Bank of America moved the Court for

judgment on the pleadings.

      On September 15, the District Court denied the Jacksons’ motion for leave

to amend, adopted the R&R, and dismissed the amended complaint with prejudice

as to MERS, Mellon, and SLS. On October 3, the Jacksons stipulated to the

dismissal of their claims against Bank of America with prejudice pursuant to

Federal Rule of Civil Procedure 41(a)(1). The next day the District Court

terminated the lawsuit with the entry of final judgment.

      On October 16, the Jacksons appealed the Court’s judgment. From that

point on, Mr. Lay’s delay tactics continued. He moved this Court to extend the

deadline to file the Jacksons’ opening brief six times. On December 5, Mr. Lay

sought and obtained an extension by phone. On December 19, Mr. Lay requested a

second extension. He stated that though he had “been working diligently on the

brief,” he had “had unexpected medical problems recently and ha[d] only been able

to work part time recently.” On January 31, 2017, Mr. Lay requested a third

extension. This time, he stated that while he was still “working diligently on the

brief,” he had been forced to travel out of town because his brother “was

hospitalized in intensive care with a life threatening illness.” Moreover, he stated,

his “work load” was “heavier than normal.” On March 2, he requested a fourth

extension, again citing his brother’s medical emergency and his workload

                                          10
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consisting of “multiple appeals pending in this Court, the Alabama Supreme Court,

and the Alabama Court of Civil Appeals.” On March 7, he requested a fifth

extension, stating that he had “just got back into town on March 7” after tending to

his brother’s illness. On March 14, Mr. Lay sought a sixth extension, again citing

his brother’s illness as the reason for his being “significantly behind schedule.”

We granted each of the motions.

      The final due date of the brief was set to March 16. Then, Mr. Lay

encountered technical difficulties in uploading the brief and was unable to meet

that deadline. As a result, he filed the Jacksons’ opening brief on March 22, 2017,

more than three months after its original due date of December 5, 2016.

      Defendants filed their brief in response. 7 Afterwards, Mr. Lay asked for

four extensions of the deadline to file the Jacksons’ reply brief. On June 16, he

requested an additional twenty-one days. He stated that his medical issues, his

“heavier than normal” workload, and his being “out of town and out of the office

on other business” had prevented him from working on the reply brief. On July 7,

the final day of the twenty-one day extension, he asked for a second extension of

ten days on account of the same reasons stated in his previous extension request.

On July 17, the last day of the ten-day extension he received, Mr. Lay requested a

third, seven-day extension. He cited verbatim the same reasons as those listed in

      7
          All Defendants were represented by one lawyer and filed one joint brief.
                                                11
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his prior two extension requests. On July 24, the day of the revised deadline, Mr.

Lay filed a fourth extension request, seeking eight additional days to file the

Jacksons’ reply brief. He stated the same reasons a fourth time. The Court granted

these motions. All told, Mr. Lay sought and obtained ten extension requests from

this Court. He filed the Jacksons’ reply brief on July 25, 2017.

                                          II.

                                          A.

      In his R&R, which the District Court adopted, the Magistrate Judge

conducted a lengthy, comprehensive review of each of the Jacksons’ sixteen counts

and concluded that none stated a cognizable claim. Rather than reviewing the

District Court’s comprehensive analysis of each of the Jacksons’ causes of action,

we affirm the District Court’s dismissal with prejudice on slightly different

grounds. “[W]e may affirm the district court’s judgment on any grounds supported

in the record.” Koziara v. City of Casselberry, 392 F.3d 1302, 1306 n.2 (11th Cir.

2004).

      The amended complaint is an incomprehensible shotgun pleading. It

employs a multitude of claims and incorporates by reference all of its factual

allegations into each claim, making it nearly impossible for Defendants and the

Court to determine with any certainty which factual allegations give rise to which

claims for relief. As such, the amended complaint patently violates Federal Rule

                                          12
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of Civil Procedure 8, which requires a plaintiff to plead “a short and plain

statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ.

P. 8(a)(2). At twenty-eight pages long and having incorporated all 123 paragraphs

of allegations into all sixteen counts, it is neither “short” nor “plain.”

       This Court has filled many pages of the Federal Reporter condemning

shotgun pleadings and explaining their vices:

       Shotgun pleadings, whether filed by plaintiffs or defendants, exact an
       intolerable toll on the trial court’s docket, lead to unnecessary and
       unchannelled discovery, and impose unwarranted expense on the
       litigants, the court and the court’s parajudicial personnel and
       resources. Moreover, justice is delayed for the litigants who are
       “standing in line,” waiting for their cases to be heard. The courts of
       appeals and the litigants appearing before them suffer as well.

Cramer v. Florida, 117 F.3d 1258, 1263 (11th Cir. 1997). 8 This case is

illustrative. In ruling on the sufficiency of the Jacksons’ sixteen claims, the

Magistrate Judge was put in the position of serving as the Jacksons’ lawyer in

rewriting the complaint into an intelligible document a competent lawyer would

       8
         See also Weiland v. Palm Beach Cty. Sheriff’s Office, 792 F.3d 1313, 1321 (11th Cir.
2015) (canvassing this Court’s “thirty-year salvo of criticism aimed at shotgun pleadings” and
observing “there is no ceasefire in sight”); Paylor v. Hartford Fire Ins. Co., 748 F.3d 1117, 1125
n.2 (11th Cir. 2014) (citing twenty-one published opinions condemning shotgun pleadings);
Davis v. Coca-Cola Bottling Co., 516 F.3d 955, 979 n.54 (11th Cir. 2008) (“[S]ince 1985 we
have explicitly condemned shotgun pleadings upward of fifty times.”); Strategic Income Fund,
L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293, 1295 n.9 (11th Cir. 2002) (“This court
has addressed the topic of shotgun pleadings on numerous occasions in the past, often at great
length and always with great dismay.”).
                                                13
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have written. 9 It took fifty-four pages and untold hours of the Magistrate Judge’s

time to do so. And, in conducting a de novo review of the complaint after the

Jacksons objected to the R&R, the District Court devoted a considerable amount of

its time as well. Absent the dismissal of the amended complaint, the Defendants,

in framing their answer, would likely have responded in kind, with a multitude of

affirmative defenses bunched together applying to each of the amended

complaint’s counts. Put colloquially: garbage in, garbage out. Hence, the final

resolution of the Jacksons’ claims would have been time-consuming and even

more of an undue tax on the Court’s resources. Tolerating such behavior

constitutes toleration of obstruction of justice. 10 This is why we have condemned

shotgun pleadings time and again, and this is why we have repeatedly held that a

District Court retains authority to dismiss a shotgun pleading on that basis alone.

       9
          See Anderson v. Dist. Bd. of Trs. of Cent. Fla. Cmty. Coll., 77 F.3d 364, 367 (11th Cir.
1996) (“Experience teaches that, unless cases are pled clearly and precisely, issues are not
joined, discovery is not controlled, the trial court’s docket becomes unmanageable, the litigants
suffer, and society loses confidence in the court’s ability to administer justice.”).
       10
          In Byrne v. Nezhat, 261 F.3d 1075 (11th Cir. 2001), abrogated on other grounds by
Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 128 S. Ct. 2131 (2008), we explained:
       Shotgun pleadings, if tolerated, harm the court by impeding its ability to
       administer justice. . . . Wasting scarce judicial and parajudicial resources impedes
       the due administration of justice and, in a very real sense, amounts to obstruction
       of justice. Although obstruction of justice is typically discussed in the context of
       criminal contempt, the concept informs the rules of law—both substantive and
       procedural—that have been devised to protect the courts and litigants (and
       therefore the public) from abusive litigation tactics, like shotgun pleadings. If use
       of an abusive tactic is deliberate and actually impedes the orderly litigation of the
       case, to-wit: obstructs justice, the perpetrator could be cited for criminal
       contempt.
Id. at 1131–32 (quotations and citations omitted) (alterations accepted).
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See, e.g., Weiland v. Palm Beach Cty. Sheriff’s Office, 792 F.3d 1313, 1320 (11th

Cir. 2015) (explaining that the district court retains “inherent authority to control

its docket and ensure the prompt resolution of lawsuits,” including, under proper

circumstances, “the power to dismiss a complaint for failure to comply with Rule

8(a)(2)”).

       We have explained that in a case in which a party, plaintiff or defendant,

files a shotgun pleading, the district court “should strike the [pleading] and instruct

counsel to replead the case—if counsel could in good faith make the

representations required by Fed. R. Civ. P. 11(b).” Byrne, 261 F.3d at 1133 n.113

(quoting Cramer, 117 F.3d at 1263). 11 This is so even when the other party does

not move to strike the pleading. Vibe Micro, Inc. v. Shabanets, 878 F.3d 1291,

1295 (11th Cir. 2018). Implicit in such a repleading order is the “notion that if the

plaintiff fails to comply with the court’s order—by filing a repleader with the same

deficiency—the court should strike his pleading or, depending on the

       11
            Rule 11(b) states, in relevant part:
       (b) Representations to the Court. By presenting to the court a pleading, written
       motion, or other paper—whether by signing, filing, submitting, or later
       advocating it—an attorney or unrepresented party certifies that to the best of the
       person’s knowledge, information, and belief, formed after an inquiry reasonable
       under the circumstances:
       (1) it is not being presented for any improper purpose, such as to harass, cause
       unnecessary delay, or needlessly increase the cost of litigation . . . .
Fed. R. Civ. P. 11(b), (b)(1) (emphasis added).
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circumstances, dismiss his case and consider the imposition of monetary

sanctions.” Byrne, 261 F.3d at 1133.

      This authority makes clear that dismissal of a complaint with prejudice is

warranted under certain circumstances. Such circumstances existed in this case.

In dismissing a shotgun complaint for noncompliance with Rule 8(a), a district

court must give the plaintiff “one chance to remedy such deficiencies.” E.g., Vibe

Micro, 878 F.3d at 1295. The Jacksons had that opportunity. Defendants moved

for a more definite statement on the ground that the complaint was a shotgun

pleading and it could not reasonably be expected to frame a responsive pleading.

Its motion fully explained the complaint’s defects. Bank of America stated,

accurately, “The pleading is vague and ambiguous such that Bank of America has

to guess as to the particular claims to which it individually should respond, and the

facts upon which Plaintiffs rely in support.” It further stated, correctly, that “the

first sentence of each count adopts and re-alleges all prior paragraphs.” It observed

that “Count Fourteen . . . ‘simply amounts to an amalgamation of all counts of the

complaint.’” (Quoting PVC Windoors, Inc. v. Babbitbay Beach Constr., 598 F.3d
802, 806 (11th Cir. 2010)). And, it explained, “With this type of drafting, Bank of

America cannot know which factual allegations pertain to which of Plaintiffs’

claims.” This was as complete an explanation of the defects in their complaint as

the Jacksons could have asked for.

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      The Jacksons did not oppose Defendants’ motions for a more definite

statement; their failure to oppose operated as an acknowledgement of these defects.

Accordingly, the District Court granted the motions and ordered them to file a

sufficient complaint. This was their opportunity. A chance to amend a complaint

does not need to come in the form of a dismissal without prejudice or the striking

of a portion of the complaint’s allegations. It can also be accomplished by

ordering the party to file a more definite statement. See Fed. R. Civ. P. 12(e) (“If

the court orders a more definite statement and the order is not obeyed within 14

days after notice of the order or within the time the court sets, the court may strike

the pleading or issue any other appropriate order.”). What matters is function, not

form: the key is whether the plaintiff had fair notice of the defects and a

meaningful chance to fix them. If that chance is afforded and the plaintiff fails to

remedy the defects, the district court does not abuse its discretion in dismissing the

case with prejudice on shotgun pleading grounds.

      Here, after being put on notice by Defendants of the specific defects in their

complaint, the Jacksons filed an amended complaint afflicted with the same

defects, attempting halfheartedly to cure only one of the pleading’s many ailments

by naming which counts pertained to each Defendant. The District Court should

have dismissed the amended complaint with prejudice because, as we have

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concluded, the amended complaint was incomprehensible. 12 Instead, the Court

dismissed the amended complaint on the merits.

       As we explained in Vibe Micro, in striking a complaint on shotgun pleading

grounds and affording the plaintiff with another opportunity to file a complaint that

passes muster, the District Court should point out the defects in the complaint.

Vibe Micro, 878 F.3d at 1295. The District Court did not do so here because it

elected to consider the merits of each claim despite the complaint’s shotgun nature

and dismiss each claim on that basis. However, in light of the Jacksons’ non-

opposition to Defendants’ motions for a definite statement, which fully explained

the defects in the Jacksons’ complaint, the Court would not have abused its

discretion if it had dismissed the amended complaint with prejudice without further

elaborating on its deficiencies—especially considering that the Jacksons agreed to

file an improved complaint yet did not do so. This basis alone is sufficient grounds

for affirming the District Court’s dismissal of the complaint with prejudice. 13

       12
            See supra note 6. The Second Amended Complaint proposed by the Jacksons fared no
better: it swelled to thirty-five pages and 141 paragraphs; it still contained sixteen counts; and it,
too, reincorporated all of the allegations into each count.
       13
           The District Court also had the authority to dismiss the complaint under Rule 41(b),
which allows for dismissal for failure to obey a court order. See Weiland, 792 F.3d at 1321 n.10.
And given Mr. Lay’s willful disregard of the Court’s order to file a more definite statement and
this Circuit’s voluminous precedent decrying shotgun pleadings, dismissal with prejudice
pursuant to Rule 41(b) was appropriate. See Betty K Agencies, Ltd. v. M/V MONADA, 432 F.3d
1333, 1338 (11th Cir. 2005) (observing that dismissal with prejudice is proper “when: (1) a party
engages in a clear pattern of delay or willful contempt (contumacious conduct); and (2) the
district court specifically finds that lesser sanctions would not suffice.” (quotations omitted)).
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                                               B.

       Federal Rule of Appellate Procedure 38 states: “If a court of appeals

determines that an appeal is frivolous, it may, after a separately filed motion or

notice from the court and reasonable opportunity to respond, award just damages

and single or double costs to the appellee.” We have imposed sanctions under

Rule 38 when plaintiffs brought RICO claims with no underlying factual basis to

support them, yet persisted in pursuing the case and appealing the district court’s

rulings to harass the defendants into settling the case. 14 See Pelletier v. Zweifel,

921 F.2d 1465, 1523 (11th Cir.1991), abrogated on other grounds by Bridge, 553
U.S. at 639, 128 S. Ct. at 2131. We have also awarded sanctions under Rule 38, in

the form of reasonable attorney’s fees and double costs, when a party ignored the

governing law and relied on “clearly frivolous” arguments. See United States v.

Single Family Residence & Real Prop., 803 F.2d 625, 632 (11th Cir. 1986); see

also Sun-Tek Indus., Inc. v. Kennedy Sky-Lites, Inc., 865 F.2d 1254, 1255 (Fed.

Cir. 1989) (awarding, pursuant to Rule 38, attorney’s fees and costs actually

incurred).

       Defendants’ motions for a more definite statement cited our precedent

decrying shotgun pleadings and made clear that filing a shotgun pleading is

       14
          In Pelletier, a portion of the sanctions we imposed was pursuant to Federal Rule of
Civil Procedure 11. 921 F.2d at 1465. We imposed those sanctions in reversing the district
court’s refusal to do so. Id.
                                               19
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grounds for dismissal in this Circuit. If Mr. Lay was not aware of this precedent

when he filed the Jackson’s initial complaint, Defendants’ motion told him all he

needed to know. Nevertheless, in responding to the District Court’s order

requiring a repleader, he stood fast, brazenly filing a facsimile of his initial

pleading. That the Magistrate Judge and the District Court examined the merits of

Mr. Lay’s new pleading does not change the fact that the appeal of the dismissal of

the amended complaint was doomed from the start.

      Mr. Lay does not dispute that the amended complaint is an impermissible

shotgun pleading that obstructs the administration of justice. Indeed, at oral

argument before this Court, he stated, “I understand [the Court’s] problem with the

shotgun pleadings, and I’m not gonna argue about that.” After acknowledging that

shotgun pleadings are “an issue in federal court,” he stated, as an excuse for his

behavior, that his use of shotgun pleadings had “never been an issue before” and

that “they are not disfavored in Alabama courts.” In other words, Alabama’s state

courts readily accept the sort of pleadings he files. This is no excuse here. When

he brought this lawsuit in the Baldwin County Circuit Court, Mr. Lay knew that

the case would be removed to federal district court because the complaint

                                           20
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contained causes of action based on federal statutes. 15 And he knew the District

Court would require a repleader, which would inexorably lead to additional delay.

       In light of this Circuit’s precedent, Mr. Lay’s appeal of the dismissal of his

incomprehensible amended complaint is frivolous. The prosecution of an

incomprehensible amended complaint with repeated requests for extensions in the

District Court and the prosecution of a frivolous appeal with repeated requests for

extensions in this Court, taken together, reveal Mr. Lay’s motive in filing this

lawsuit. His motive was, and is, to delay or prevent the completion of Mellon’s

foreclosure. 16 This constitutes an abuse of judicial process, a “deliberate use of a

legal procedure, whether criminal or civil, for a purpose for which it was not

designed.” Dykes v. Hosemann, 776 F.2d 942, 950 (11th Cir. 1985). The

procedures of the federal courts were not designed for the purpose of

accommodating Mr. Lay’s objective.

       We accordingly affirm the judgment of the District Court. We also instruct

Mr. Lay to show cause why we should not order him to pay the Appellees double

       15
          Prior to filing the instant lawsuit, Mr. Lay filed numerous cases, each with a shotgun
complaint like the one here, in the state courts of Alabama. Each included all or most of the
same boilerplate counts against different defendants as those alleged against Defendants in this
case. Each was removed to federal district court. See, e.g., Hill v. Wells Fargo Bank N.A., No.
2:16-cv-1591 (N.D. Ala. Sept. 26, 2016); Turner v. Bank of N.Y. Mellon, No. 2:16-cv-1520 (N.D.
Ala. Sept. 13, 2016); Nelson v. Wells Fargo Bank, N.A., No. 2:16-cv-841 (N.D. Ala. May 20,
2016).
       16
          Counsel’s firm, Hood & Lay, LLC, states on its website, “We maintain a heavy volume
of wrongful foreclosure cases and creditor abuse cases in the State of Alabama, litigating in state
court, federal court and bankruptcy court.” Hood & Lay, LLC, http://www.whlfirm.com/ (last
visited Apr. 11, 2018).
                                                21
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costs and their expenses, including the attorney’s fees they incurred in defending

these appeals. See Pelletier, 921 F.2d at 1523; Cramer, 117 F.3d at 1265 & n.17.

He shall show such cause in the form of a letter addressed to the Clerk of this

Court within twenty-one days of the issuance of this opinion.

      SO ORDERED.

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BLOOM, District Judge, specially concurring:

      I concur in the Court’s judgment but I write separately to provide guidance

to the district courts when faced with a shotgun pleading following a grant of leave

to replead and resurrection of a similarly improper pleading. Here, the amended

complaint fared no better than the initial pleading, and counsel took no action to

remedy the deficiencies pointed out in either the unopposed motion for a more

definite statement or the motion to dismiss.      At that point, if Rule 8(a) and

Iqbal/Twombly are to have meaning, the district courts have the authority to strike

the pleading, dismiss the case with prejudice, and reserve jurisdiction to award the

defendant’s attorney fees and costs. There is simply a point in litigation when a

defendant is entitled to be relieved from the time, energy, and expense of

defending itself against seemingly vexatious claims, and the district court relieved

of the unnecessary burden of combing through them.

      Perhaps the Plaintiff’s attorney engineered a scheme, perhaps not. It would

be unfortunate, indeed outrageous, if Mr. Lay’s pleas for extensions, both at the

district and appellate levels (due to travel, workload, repeated illness,

hospitalization and death in the family) were not made in good faith and one large

ruse. We may never know his true motivation. I write separately, however, to

emphasize the crux of the majority’s holding today: Neither Mr. Lay’s numerous

extensions nor the reasons behind them are the source of the Court’s finding of

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frivolity. Indeed, the Court and counsel entertained his requests for extensions of

time with the record before them. Rather, it is his plainly deficient pleading,

refiled and appealed, that marshalled substantial unnecessary resources and that

leads to the Court’s finding today.

                                         24
         Case 1:16-cv-00062-CG-M Document 17 Filed 04/12/16 Page 1 of 28
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                                         EXHIBIT 1
                 IN THE UNITED STATES DISTRICT COURT
               FOR THE SOUTHERN DISTRICT OF ALABAMA

KARUN N. JACKSON,         )
URSULA D. JACKSON,        )
                          )
    PLAINTIFFS,           )
                          )
v.                        )                              CIVIL ACTION NO.:
                          )                               CV-2016-0062
BANK OF NEW YORK MELLON )
BANK OF AMERICA, N.A.     )
SPECIALIZED LOAN SERVICES )
MERS
    DEFENDANTS.

                                      AMENDED COMPLAINT

            Come now, the Plaintiffs, Karun Jackson and Ursula Jackson, by and

through their attorney of record and file their complaint against Bank of

New York Mellon1, Bank of America, N.A., Specialized Loan Services, and

Mortgage Electronic Registration Systems in accordance with the Federal

Rules of Civil Procedure, and in support of said complaint states as follows:

                                           PARTIES

1.          The Defendants, Specialized Loan Services, Bank of America, and
            Bank of New York Mellon2 in this action are foreign corporations
            doing business in Baldwin County Alabama, and are “debt
            collectors” as that term is defined by 15 U.S.C. § 1692a(6).
     1
         The Bank of New York Mellon FKA The Bank of New York, as Trustee for the Certificate
          Holders of the CWABS, Inc., ASSET-BACKED CERTIFICATES, SERIES 2006-17
2
 The Bank of New York Mellon’s complete and full listing as a Defendant is actually: The Bank of New
York Mellon FKA The Bank of New York, as Trustee for the Certificate Holders of the CWABS, Inc.,
ASSET-BACKED CERTIFICATES, SERIES 2006-17.

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2.      The Plaintiffs, Karun Jackson and Ursula Jackson, in this action are
        adult resident of Baldwin County, Alabama, and are “consumers”
        and/or persons affected by a violation of the FDCPA.

                                   JURISDICTION

     3. Jurisdiction is proper in this Court as the underlying action is based
        upon a contract executed in Baldwin County, Alabama. The action is
        brought regarding an attempted foreclosure instituted in Baldwin
        County, Alabama, and is in the nature of a complaint regarding that
        attempted foreclosure action. The action is brought to enforce the
        contractual remedies allowed in the mortgage document. The action
        seeks damages in contract and tort for the actions of the Defendants
        with respect to their servicing and attempted foreclosure on the loan in
        question.

                                    VENUE

4.      Venue is proper in this Court as the Plaintiffs are citizens of Baldwin
        County, all or substantially all of the wrongs complained of occurred
        in this county, and the property is situated in this county.

                              STATEMENT OF FACTS

     5. Karun Jackson and Ursula Jackson bought the property located at
        26235 Jackson Circle extension Daphne AL 36526. On August 28,
        2006, the Jacksons bought their property and executed a mortgage
        loan and received and executed a mortgage with First Residential
        Mortgage Network Inc. and also signed a promissory note with First
        Residential Mortgage Network Inc. The Mortgage contract provides
        for an escrow account for the taxes and insurance. The mortgagee is
        required to pay for the insurance and taxes from the escrow account.

     6. The Jacksons currently reside at 26235 Jackson Circle extension
        Daphne AL 36526.

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      7. The loan was allegedly later transferred and sold to Specialized Loan
         Services and Bank of New York Mellon although the Plaintiffs
         dispute the validity of the alleged transfer.

      8. On November 8, 2015, Defendants improperly and wrongfully began
         foreclosure proceedings on the Jacksons property. The mortgage
         governs acceleration and sets for the lenders remedies and provides
         that Lender shall give notice to the borrower prior to acceleration
         following borrower’s breach of any covenant or agreement in this
         Security Instrument. The Defendants or their agents3 refused to
         engage in a legitimate and good faith mortgage foreclosure avoidance
         workout, accept the proper payments, inflated the amount due, and
         have threatened to foreclose on Plaintiffs without any basis to do so

      9. The Jauregui Law Firm handled the attempted foreclosure sale.

      10. The Defendants began foreclosure proceedings on Plaintiffs’
         property on November 8, 2015 despite knowing that the Plaintiffs, the
         Jacksons claimed that they were not in default and that the attempted
         foreclosure sale was wrongful and invalid.

      11.The foreclosure sale date was reported to the national credit bureaus
         and the Jacksons’ credit was damaged as a result of the reporting of
         the foreclosure sale date which was invalid and wrongful.

12.      The Jacksons, upon information and belief, contend that the alleged
         Assignments of the note and mortgage is defective, void, or otherwise
         unenforceable as to the security instrument in question in this case.
         None of the Defendants are the original lender. Federal law
         1641(g)(1)(B) requires a new creditor to provide the date of transfer,
         which has not occurred.

13.      The Jacksons contend that the attempted sale was wrongful, illegal, in
         violation of law and the documents governing the relationship
         between the Jacksons and the owners of the note and mortgage.
         Furthermore, the Jacksons allege that they were not behind in their

3
  Agency is a set of contractual, quasi-contractual and non-contractual fiduciary relationships that involve
a person, called the agent, that is authorized to act on behalf of another (called the principal) to create
legal relations with a third party

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         payments on the mortgage and that they were improperly defaulted
         and that the note was improperly accelerated.

14.      The Jacksons contend that the foreclosing entity lacked standing or
         authority to initiate foreclosure proceedings on his property.

15.      The Jacksons allege that the actions of the Defendants and its agents,
         employees and servants were wrongful and tortious.

16.      The Jacksons allege that the actions of Defendants by improperly
         attempting foreclosure on their property is a violation of law,
         wrongful and tortious and that the Defendants had no authority to
         foreclose on his home or property, and that its actions constitute
         negligence, wantonness, abuse of process and slander of title.

17.      As a direct result of the acts complained of the Jacksons have suffered
         great mental anguish, damage to his reputation, economic and
         emotional damages and claims from Defendants all damages
         allowable under the law.

18.In November 2012, the Jacksons sent a monthly payment to Defendants;
   however, Defendants refused the payment and returned it to the Jacksons
   without explanation. After, the Jacksons called and inquired as to the
   returned payment, Defendants advised Jacksons that they were in default
   for failure to make payments, but could not explain why they were
   allegedly in default. Moreover, Defendants advised the Jacksons that it
   would no longer accept payments from them and that Defendants would
   be turning over their account for foreclosure. Prior to September 2012
   Defendants accepted and cashed Plaintiffs monthly payments, but failed
   to properly apply them to his account pursuant to paragraph 2 of the
   mortgage contract. From October 2012 until January 2014, Defendants
   returned payments to the Jacksons again also in violation of the mortgage
   contract.

      19.Specifically, the July 2011, May 2012, August 2012, and September
         2012 payments, as well as others, were cashed by Defendants but not
         applied at all to the Jacksons’ account.

      20.On November 8, 2015, Defendants improperly and wrongfully began
         foreclosure proceedings on the Jacksons’ property.

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21.      The Defendants purportedly began foreclosure proceedings on
         Plaintiff’s property on November 8, 2015 despite knowing that the
         Plaintiff, the Jacksons, claimed that the attempted foreclosure sale was
         wrongful and invalid, and that they were not in default at the time of
         the acceleration.

22.      The foreclosure sale date which included false information related to
         the alleged default on the indebtedness was published in the
         newspaper in November 2015 and December 2015. Furthermore, said
         false and inaccurate information related to the Jacksons’ alleged
         default was reported to the national credit bureaus and the Jacksons’
         credit and reputation were damaged as a result of the reporting of the
         foreclosure sale date and default which was invalid and wrongful.

23.      The Jacksons contends that the attempted sale was wrongful, illegal,
         in violation of law and the documents governing the relationship
         between the Jacksons and the owners of the note and mortgage.
         Furthermore, the Jacksons alleges that they were not behind in their
         payments on the mortgage and that they were improperly defaulted
         and that the note was improperly accelerated.

24.      The Jacksons alleges that the actions of Defendants by improperly
         attempting foreclosure on their property is a violation of law,
         wrongful and tortious and that the Defendant had no authority to
         foreclose on their home or property, and that its actions constitute
         negligence, wantonness, abuse of process and slander of title. As a
         direct result of the acts complained of the Jacksons has suffered great
         mental anguish, damage to his reputation, economic and emotional
         damages and claims from Defendants all damages allowable under the
         law.

      25.In January 2013, the Consumer Financial Protection Bureau issued a
         number of final rules concerning mortgage markets in the United
         States, pursuant to the DFA, Public Law No. 111-203, 124 Stat. 1376
         (2010). Specifically, on January 17, 2013, the CFPB issued the Real
         Estate Settlement Procedures Act (Regulation X) and the Truth in
         Lending Act (Regulation Z) Mortgage Servicing Final Rules, 78 F.R.
         10901 (Regulation Z) (February 14, 2013) and 78 F.R. 10695
         (Regulation X) (February 14, 2013), which became effective on

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        January 10, 2014. The Jacksons’ mortgage loan in the instant matter
        is a "federally related mortgage loan" as said term is defined by 12
        C.F.R. § 1024.2(b). The Defendants are subject to the aforesaid
        Regulations and do not qualify for the exception for "small servicers”
        as defined in 12C.F.R. § 1026.41(e)(4) or the exemption for a
        “qualified lender” as defined in 12 C.F.R. § 617.700. The Jacksons
        are asserting a claim for relief against Defendants for breach of the
        specific rules under Regulation X as set forth below. The Jacksons
        has a private right of action under RESPA pursuant to 12 U.S.C.
        §2605(f) for the claimed breaches and such action provides for
        remedies including actual damages, costs, statutory damages, and
        attorneys’ fees.

                              COUNT ONE
                             NEGLIGENCE
                         (BANK OF NEW YORK MELLON)
                         (SPECIALIZED LOAN SERVICES)

  26.    The Plaintiffs re-allege all prior paragraphs as if set out here in full.

27.     The Defendants negligently serviced the loan made the basis of this
        suit, negligently attempted to collect sums not owed by the Plaintiff,
        negligently caused his property insurance to be canceled, negligently
        defaulted the Plaintiff, negligently attempted a foreclosure sale on
        Plaintiff’s property, were negligent by failing to make sure that
        information disseminated to others (including the national credit
        bureaus and those credit grantors likely to use the information
        provided by those bureaus) was not false, neither libelous nor
        slanderous, and rose to the level of maximum accuracy; negligent by
        failing to properly train their employees on the thorough investigation
        of disputed accounts; negligent by failing to properly train, and/or
        supervise their employees and agents with regard to the handling of
        Plaintiff’s loan account and failing to remove the adverse reporting
        from Plaintiff’s credit once he disputed the same.

28.     As a direct result of the said negligence, the Plaintiff was injured and
        damaged as alleged above and has suffered mental anguish, economic
        injury and all other damages allowed by law.

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29.     As a result thereof, the Defendant is liable for all natural, proximate
        and consequential damages due to their negligence.

                               COUNT TWO
                              WANTONNESS
                          (BANK OF NEW YORK MELLON)
                          (SPECIALIZED LOAN SERVICES)

30.     The Plaintiff re-alleges all prior paragraphs as if set out here in full.

31.     The Defendant acted with reckless indifference to the consequences,
        and consciously and intentionally wrongfully serviced the loan made
        the basis of this suit, attempted to collect sums not owed by the
        Plaintiff, caused his property insurance to be canceled, defaulted the
        Defendant, attempted to conduct a foreclosure sale on Plaintiff’
        property, failed to make sure that information disseminated to others
        (including the national credit bureaus and those credit grantors likely
        to use the information provided by those bureaus) was not false,
        neither libelous nor slanderous, and rose to the level of maximum
        accuracy; failed to properly train their employees on the thorough
        investigation of disputed accounts; failed to properly train, and/or
        supervise their employees and agents with regard to the handling of
        the Jacksons’ loan account and failing to remove the adverse reporting
        from the Jacksons’ credit once he disputed the same.

32.     These actions were taken with reckless indifference to the
        consequences, consciously and intentionally in an effort to increase
        profits for the Defendant.

33.     The Defendant knew that these actions were likely to result in injury
        to the Plaintiff including financial and emotional injuries and mental
        anguish.

34.     As a proximate result of the Defendant's wantonness the Plaintiff was
        injured and harmed and suffered financial injury and emotional
        damage.

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35.     As a result thereof, Defendant is liable for all natural, proximate and
        consequential damages due to its wantonness as well as punitive
        damages upon a proper evidentiary showing.

                              COUNT THREE
                           UNJUST ENRICHMENT
                          (BANK OF NEW YORK MELLON)
                          (SPECIALIZED LOAN SERVICES)

36.     The Plaintiff adopts and re-alleges all prior paragraphs as if set out
        here in full.

37.     The actions of the Defendant in attempting foreclosure on the home of
        the Plaintiff in violation of law resulted in Defendant being unjustly
        enriched by the payment of fees, insurance proceeds and equity in the
        home.

38.     As a result of the Defendant’s unjust enrichment, the Plaintiff has
        been injured and damaged in that the Plaintiff has been forced to pay
        charges that were illegal, wrong in character, wrong in amount,
        unauthorized, or otherwise improper under threat of foreclosure by the
        Defendant.

39.     The Plaintiff claim all damages allowable under law as a result of the
        Defendant’s wrongful conduct and unjust enrichment.

                             COUNT FOUR
                         WRONGFUL FORECLOSURE
                         (BANK OF NEW YORK MELLON)
                         (SPECIALIZED LOAN SERVICES)

40.     The Plaintiff re-alleges all prior paragraphs as if set out here in full.

41.     Defendants wrongfully initiated and conducted a foreclosure
        proceeding against the Plaintiffs in violation of law.

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42.     The foreclosure proceeding conducted on January 11, 2016 by the
        Defendants were either negligent, wanton or intentional, depending on
        proof adduced at Trial. The power of sale was exercised for a purpose
        other than to secure the debt owed by plaintiff, as the plaintiff was
        current on the debt at the time of the default and acceleration.

43.     As a result thereof, the Defendants are liable for all natural, proximate
        and consequential damages due to their actions including an award of
        punitive damages upon a proper evidentiary showing.

                                    COUNT FIVE
                                 SLANDER OF TITLE

                            (BANK OF NEW YORK MELLON)
                          (SPECIALIZED LOAN SERVICES)

44.     The Plaintiff re-alleges all paragraphs as if set out here in full.

45.     Defendant, in attempting foreclosure has caused a cloud to be placed
        on the title of the property of the Plaintiff.

46.     As the proximate cause of the Defendant’s said slandering of the
        Plaintiff’s title, he was caused to suffer injuries and damages and
        claims all damages allowable under law.

                                COUNT SIX
                          BREACH OF CONTRACT
                            (ALL DEFENDANTS)

47.     The Plaintiff adopts and re-alleges all prior paragraphs as if set out
        here in full.
48.     The Plaintiff and his Lender entered into the standard Fannie
        Mae/Freddie Mac Uniform Instrument" mortgage agreement.
49.     The Defendants serviced the loan and breached the agreement by
        failing to comply with essential terms in paragraph 2 regarding the

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         application of payment and the notice requirements of paragraph 22 of
         the agreement.
50.      As a result of the defendant’s breach of the mortgage contract, the
         Plaintiff was caused to suffer injuries and damages and claims all
         damages allowable under law.

51.      That paragraph 2 of the terms of the agreement entered into between
         Plaintiff and with First Residential Mortgage Network Inc. detail the
         application of payments. That, as more fully described above,
         Defendants failed to apply regular monthly payments, supplemental
         monthly payments, in the proper manner according to the terms of the
         note and mortgage. More specifically, Defendants never applied
         some payments at all to Jacksons’ account even though Jacksons sent
         in the payment and it was deposited by Defendants. Apparently,
         Defendants have misplaced or is unable to account for the funds from
         payments made or sent by Jacksons. Moreover, numerous other
         payments made by Jacksons were returned to him by Defendants
         without reason or without explanation. More specifically, for
         example, in November 2013, the Jacksons’ payment was returned to
         them.

52.      That this misapplication of funds constitutes a breach of the mortgage
         contract and thus entitles the Jacksons to damages.

      53. In addition, Defendants failed to send proper notices to the Jacksons
         as required by the mortgage contract. Even if the Jacksons are in
         default, Defendants failed to send a proper notice of default, a proper
         notice of intent to accelerate, and a proper notice of acceleration. The
         contract terms related to notice are as follows:
               Lender shall give notice to Borrower prior to
               acceleration following Borrower’s breach of any
               covenant or agreement in this Security Instrument . . . The
               notice shall specify (a) the default; (b) the action required
               to cure the default; (c) a date not less than 30 days from
               the date the notice is given to Borrower by which the
               default must be cured; and (d); that failure to cure the
               default on or before the date specified in the notice may
               result in acceleration of the sums secured by this Security
               Instrument and sale of the Property. The notice shall
               further inform the Borrower of the right to reinstate after
               acceleration and the right to bring a court action to assert
               the non-existence of a default or any other defense of

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                Borrower to acceleration and sale. If the default is not
                cured on or before the date specified in the notice, Lender
                at its option may require immediate payment in full of all
                sums secured by this Security Instrument….
Accordingly, Defendants failed to comply with this provision of the
mortgage contract and has therefore breached the contract.

      54.Moreover, Paragraph 22 of the mortgage document gives the Plaintiff
         the right to bring an action to dispute the existence of a default and raise
         defenses thereto. Accordingly, the Plaintiff exercises his right pursuant
         to paragraph 22 of the mortgage document and hereby challenges the
         existence of a default on his mortgage indebtedness. As previously,
         discussed, the Plaintiff is not in default, has made payments every
         month as required by the mortgage and note and is not behind on his
         mortgage payments.

                                    COUNT SEVEN
                                      FRAUD

                           (BANK OF NEW YORK MELLON)
                           (SPECIALIZED LOAN SERVICES)
                                     (MERS)

55.      The Plaintiff adopts and re-alleges all prior paragraphs as if set out
         here in full.

56.      The Defendant misrepresented that the loan was in default. Further,
         the Defendant made false and misleading representations, to wit:
         dissemination of inaccurate information regarding the loan account as
         being in default and dissemination of inaccurate information regarding
         the credit history and credit of the Plaintiff that was known to be false.
         Defendants also falsified documents and records related to the
         Jacksons mortgage loan and attempted to fraudulent transfer, sale or
         assign the loan by illegal and fraudulent means.

57.      Said misrepresentations were made negligently and/or willfully and/or
         wantonly and/or fraudulently, and/or recklessly with the intent to
         induce the Plaintiff to act thereon and upon which the Plaintiffs did in
         fact act to their detriment.

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58.     Plaintiff justifiably relied upon said representations made by
        Defendant and as a result of said reliance proceeded with the
        execution of the loan; at the time said representations were made the
        same were false and known by the Defendant to be false and/or were
        false and made by mistake with the intent for Plaintiff to rely thereon.

59.     As a proximate cause of the aforementioned fraudulent
        misrepresentations made by the Defendant, Plaintiff was proximately
        caused to suffer injury and damage.

                             COUNT EIGHT
                        PLACED IN A FALSE LIGHT
                         (BANK OF NEW YORK MELLON)
                         (SPECIALIZED LOAN SERVICES)

60.     Plaintiff adopts the above paragraphs as if fully set forth herein.

61.     In association with the servicing of the loan account Defendants held
        Jacksons up in a false light and made undesirable and negative
        character and credit reputation remarks on or about the Jacksons by
        either speaking or writing undesirable and negative character and
        reputation remarks about Jacksons which was offensive, untrue, and
        inaccurate, and which alleged Jacksons was behind on his debt
        serviced by Defendants, has a bad debt with Defendants.

62.     Defendants knew Jacksons was not in default on the account, as it was
        paid to date and as such, that there existed no basis in law or fact, for
        the Defendants to make offensive, untrue, and inaccurate reports
        regarding Jacksons. Defendants knew this at the times they were
        reporting such information.

63.     Defendants held Jacksons up in a false light and made undesirable and
        negative and credit reputation remarks on or about Jacksons in the
        national credit reporting media and to his homeowner insurance
        carrier. Defendants provided this false information to third parties.

64.     The conduct Defendants was objectionable to the Jacksons and to any
        reasonable person. Defendants’ action was willful, reckless, wanton

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        and/or made with malice and resulted in Jacksons being unreasonably
        placed in a false light.

65.     Due to Defendants’ conduct, the Jacksons were caused to have
        negative credit reports, denied homeowners insurance, held up to
        public ridicule or shame, humiliated, made to suffer physically and
        mentally, and endure anguish.

        WHEREFORE, PREMISES CONSIDERED, the Jacksons Pray for
        Judgment against Defendants in an amount to be determined by trier
        of fact.

                                    COUNT NINE

                        DEFAMATION, LIBEL, SLANDER
                         (BANK OF NEW YORK MELLON)
                         (SPECIALIZED LOAN SERVICES)

66.     Plaintiff adopts the above paragraphs as if fully set forth herein.

67.     The Defendant willfully, wantonly, recklessly and/or maliciously
        published and communicated false and defamatory statements
        regarding the Plaintiff and said statements have subjected the Plaintiff
        to the denial of credit by third parties, resulted in homeowner’s
        insurance cancellation and harmed the Plaintiff’s credit reputation. As
        previously stated, the Plaintiff was current on his mortgage account
        and has made payments each and every month. Accordingly, he was
        not in default. Despite the Jacksons’ account being current,
        Defendants published in the newspaper false information regarding
        his account being in default and false information regarding its right
        to conduct a foreclosure sale on the Jacksons’ property.

68.     Said false and defamatory statements have harmed the reputation of
        the Jacksons and/or deterred third persons from associating with the
        Jacksons.

69.     The Defendant communicated to credit reporting agencies and/or
        other third parties, false information that Jacksons defaulted on the
        loan and was in foreclosure, disseminated and imputed false and

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        misleading credit history and worthiness information concerning the
        Jacksons.

70.     Defendants published such defamatory and libelous information in the
        Northport Gazette newspaper.

71.     Said communications were false in that Plaintiff was not indebted to
        the Defendant in the amount reported, and Plaintiff was not delinquent
        as reported by the Defendant, and Plaintiff is the legal and rightful
        owner of the mortgage note.

72.     At the time said communications were made, Defendants knew, or
        should have known, of the falsity of the communication or recklessly
        disregarded the potential inaccuracy of the information, yet
        knowingly, willfully, and maliciously communicated the falsity.

73.     As a result of the intentional communication to third parties of false
        information, the Jacksons were caused to suffer injury to his
        reputation in the eyes of the community and the public and was
        subject to ridicule.

74.     Said communications were oral and/or written.

75.     As a proximate consequence of the Defendants’ acts, the Jacksons
        were caused to be injured and damaged.

76.     Defendants published such defamatory and libelous information.
        Defendants knew the Jacksons were not in default on the account, as it
        was paid to date and as such, that there existed no basis in law or fact,
        for the Defendants to make offensive, untrue, and inaccurate reports
        regarding the Jacksons. Defendants knew this at the times they were
        reporting such information. Furthermore, Defendants published in the
        local newspaper in Baldwin County Alabama the false information of
        the default on the loan in the foreclosure sale notice. This foreclosure
        sale notice states that the Jacksons’ loan is in default and in
        foreclosure. Defendants knew this information was inaccurate at the
        time it published this notice in the local paper, and the published false
        information harmed the Jacksons’ reputation and character. As a
        result, the Jacksons’ suffered damages of their reputation which

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            negatively affected their credit and their business causing monetary
            losses.

77.         Said communications were false in that Plaintiff were not indebted to
            the Defendant in the amount reported, Plaintiff was not delinquent as
            reported by the Defendant, and Defendant is not the legal and rightful
            owner of the mortgage note.

78.         At the time said communications were made, Defendants knew, or
            should have known, of the falsity of the communication or recklessly
            disregarded the potential inaccuracy of the information, yet
            knowingly, willfully, and maliciously communicated the falsity.

79.         As a result of the intentional communication to third parties of false
            information, the Jacksons were caused to suffer injury to their
            reputation in the eyes of the community.

                                COUNT TEN:
                      VIOLATIONS OF TRUTH IN LENDING
                           (SPECIALIZED LOAN SERVICES)

      80. The Jacksons re-allege and adopt the above paragraphs as if fully set
         forth herein and also asserts the following:

      81.          Defendants violated the Federal Truth in Lending Act.

            8 2 . The Jacksons institute this action for actual damages, statutory
                damages, attorney’s fees, and the costs of this action against Defendants
                for multiple violations of the Truth in Lending Act, 15 U.S.C.
                §1601et seq. , (hereinafter TILA),and Federal Reserve Board
                Regulation Z, 12 C.F.R. § 226,p r o mu l g a t e d p u r s u a n t
                thereto.

      83.      This complaint is solely for monetary damages pursuant to15
            U.S.C. § 1640. Under 15 U.S.C. § 1640(a), it is not necessary to
            allege or to prove actual damages to recover statutory damages.

      84.Defendants, are covered by the Act as it regularly extended or
         offered to extend consumer credit for which a finance charge is
         or may be imposed or which, by written agreement, is

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   payable in more than four installments, and is the person to
   whom the transaction which is the subject of this action is
   initially payable, making defendant a creditor within the
   meaning of TIL, 15 U.S.C. § 1602(f) and Regulation Z §
   226.2(a)(17).

85.Defendants did not provide a proper copy of the notices
   required by the Act to the Jacksons. The disclosure statement
   issued in conjunction with this consumer credit transaction violated
   the requirements of Truth in Lending and Regulation Z in the
   following and other respects: (a). By failing to provide the
   required disclosures prior to consummation of the transaction in
   violation of 15 U.S.C.§ 1638(b) and Regulation Z § 226.17(b). (b).
   By failing to make required disclosures clearly and
   conspicuously in writing in violation of 15 U.S.C. § 1632(a) and
   Regulation Z § 226.17(a). (c). By failing to include in the finance
   charge certain charges imposed by defendant payable by plaintiff
   incident to the extension of credit as required by 15 U.S.C. §
   1605and Regulation Z § 226.4, thus improperly disclosing the finance
   charge in violation of 15 U.S.C. § 1638(a)(3) and Regulation Z §
   226.18(d). Such amounts include, but are not limited to the attorney
   fees and late fees, 15 U.S.C. § 1605(a), Regulation Z§ 226.4(a).

86.The regulations require that the notice shall identify the transaction or
   occurrence and clearly and conspicuously disclose the following:
   The retention or acquisition of a security interest in the consumer’s
   principal dwelling. The consumer’s right to rescind, as described in
   paragraph (a)(1) of this section. How to exercise the right to rescind,
   with a form for that purpose, designating the address of the creditor’s
   place of business. The effects of rescission, as described in paragraph
   (d) of this section. The date the rescission period expires. (See Reg. Z
   §§ 226.15(b)(5) and 226.23(b).

87.By charging “attorney fees” and other “fees” not authorized by the
   mortgage contract, Defendants has made unauthorized charges and
   failed to disclose these charges in violation of the Act. In this case,
   Defendants added fees to the Jacksons’ account in September 2011
   which are referenced in the notice of default. Moreover, once the
   account was turned over to the attorney for foreclosure in October
   2013, additional fees were improperly added to the account. Each

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         time the sale was published in the newspaper up to and including
         December 2015, Defendants added additional and unauthorized fees
         to the Jacksons’ account balance.

      88.By calculating the annual percentage rate (APR) based upon
         improperly calculated and disclosed finance charges and amount
         financed, 15 U.S.C. § 1606, Regulation Z§ 226.22, Defendants
         understated the disclosed annual percentage rate in violation of 15
         U.S.C. § 1638(a)(4) and Regulation Z § 226.18(c).

      89. That the Defendants have been improperly amortizing the loan, and
         has failed to provide proper disclosures to the Jacksons. Defendants
         failed to send proper monthly statements to the Jacksons in violation
         of the Act.

      90. By reason of the aforesaid violations of the Act and
         Regulation Z, Defendants is liable to Jacksons in the amount of twice
         the finance charge, actual damages to be established at trial, and
         attorney’s fees and costs in accordance with 15U.S.C. § 1640 for
         violations of Federal Truth in Lending Act.

                              COUNT ELEVEN:
                  VIOLATIONS OF REAL ESTATE SETTLEMENT
                         PROCEDURES ACT (RESPA)
                        (SPECIALIZED LOAN SERVICES)

91.       The Jacksons re-allege and adopts the above paragraphs as if fully set
         forth herein and also asserts the following:

92.      Defendant, SLS, is a loan “servicer”4 of the Plaintiff’s “federally
         related mortgage loan” as those terms are defined in the RESPA, 12
         U.S.C. § 2602(1) and 12 U.S.C. § 2605(i)(2). Defendants violated the
         Real Estate Settlement Procedures Act (REPA) by failing to
         acknowledge or respond to Jacksons’ Qualified Written Request
         (QWR). Defendant violated the Real Estate Settlement Procedures
         Act (REPA) by failing to acknowledge or respond to Jacksons’
4
 A servicer of the loan collects payments from the borrower, sends payments to the lender and handles
administrative aspects of the loan.

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        Qualified Written Request (QWR) within in the time provided by
        federal law.

93.     The Jacksons made a Qualified Written Request pursuant to RESPA
        to Defendants on October 29, 2015 and December 15, 2015 which
        was sent by certified mail. It was signed for by Defendants
        acknowledging receipt of the QWR. Defendants never acknowledged
        receipt of the QWR request and never responded to it. Defendants’
        failure to acknowledge and properly respond to the QWR request is a
        violation of RESPA or the Dodd-Frank Act. Because of said
        violations of said acts, the Jacksons were damaged because they were
        not informed of the information regarding their loan. Because the
        Defendants failed to give this information to the Jacksons, they were
        not able to stop the foreclosure on their home. Accordingly, the
        Jacksons are entitled to damages from the Defendants. Plaintiffs
        suffered damages by Defendants’ failure to comply with the RESPA
        law because they were unable to get a proper accounting of the fees
        and charges owed on the account to cure any alleged default and as a
        result a foreclosure sale was set.

                              COUNT TWELVE
                         FAIR CREDIT REPORTING ACT

                         (SPECIALIZED LOAN SERVICES)

94.     The Jacksons re-allege and adopts the above paragraphs as if fully set
        forth herein and also asserts the following:

95.     The Jacksons disputed the account and false credit reporting.
        Defendants were inaccurately reporting that the Jacksons were
        delinquent in their mortgage loan and in Default. The Jacksons
        repeatedly contacted Defendants from September 2012 until January
        11, 2016 and informed Defendants regarding ITS INACCURATE
        REPORTING. Moreover, the Jacksons contacted the credit national
        bureaus and informed them of the inaccurate information and disputed
        same. Nonetheless the credit reports were never changed because
        Defendants kept reporting the account as delinquent and in
        foreclosure.

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96.     Despite receipt of the dispute, defendants failed to properly
        investigate and respond, failed to make any effort to verify the
        complaints of plaintiff and reported the false, derogatory information
        to the consumer reporting agencies in violation of their duties as a
        furnisher of credit.

97.     According to the national consumer reporting agencies’ reports the
        defendants falsely reported about plaintiff’s disputed debt.

98.     Defendants likewise willfully, or alternatively, negligently, violated
        the Fair Credit Reporting Act by failing to properly conduct a
        reasonable investigation and by failing to supply accurate and
        truthful information.

99.     Rather, defendants reported false and inaccurate information and
        failed to retract, delete and suppress false and inaccurate information
        it reported about the plaintiff.

100. Defendants failed to conduct a reasonable investigation with respect
     to consumer credit data it reported about the plaintiff.

101. Defendants failed to review all relevant and pertinent information
     provided to it regarding the debt.

102. As a proximate result of the Defendants’ fraudulent conduct the
     Plaintiffs have been injured and damaged.

103. Defendants’ violations and false credit reporting about plaintiff have
     been a substantial factor in causing credit denials and other damages.

104. Defendants are liable unto plaintiff for all actual, statutory, exemplary
     and punitive damages awarded in this case, as well as other demands
     and claims asserted herein including, but not limited to, out-of-
     pocket expenses, credit denials, costs and time of repairing their
     credit, pain and suffering, embarrassment, inconvenience, lost
     economic opportunity, loss of incidental time, frustration, emotional
     distress, mental anguish, fear of personal and financial safety and
     security, attorneys' fees, and court costs, and other assessments proper
     by law and any and all other applicable federal and state laws,

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      together with legal interest thereon from date of judicial demand until
      paid.

105. WHEREFORE PLAINTIFF, PRAYS that after all due proceedings be
     had there be judgment herein in favor of Plaintiff and against
     Defendants. 1) That there be Judgment in favor of Plaintiff and
     against Defendants, for all reasonable damages sustained by Plaintiff
     including but not limited to actual damages, statutory damages,
     compensatory damages, out-of-pocket expenses, credit denials,
     adverse action, lost credit opportunities, costs and time of repairing
     his credit, pain and suffering, embarrassment, inconvenience, lost
     economic opportunity, loss of incidental time, frustration, emotional
     distress, mental anguish, fear of personal and financial safety and
     security, and for punitive/exemplary damages, attorneys' fees, and
     court costs, and other assessments proper by law and any and all other
     applicable federal and state laws, together with legal interest thereon
     from date of judicial demand until paid; and 2) That this Honorable
     Court order Defendants to reinvestigate and correct the credit
     report(s), data emanations, and credit histories of and concerning
     Plaintiff or any of plaintiff’s personal identifiers.

                           COUNT THIRTEEN

  VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES
                  ACT 15 U.S.C. § 1692 et seq.

                       (SPECIALIZED LOAN SERVICES)

      106. The Jacksons re-incorporate by reference all of the above
            paragraphs of this Complaint as though fully stated herein.

      107. Defendant servicer, Specialized Loan Services (SLS) is
          considered a “debt collector” under the FDCPA as when it each
          began servicing the loan, the loan was in default and it was
          serviced as a defaulted loan. SLS has attempted to collect the
          debt. The debt is the loan for the Plaintiffs’ house and thus
          qualifies as a consumer or personal debt under the FDCPA. SLS
          violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692
          et seq. (“FDCPA”), committed state law violations in attempting

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       to collect the debt and invaded Plaintiff’s personal and financial
       privacy by its illegal efforts to collect a consumer debt from the
       Jacksons.

  108. The acts and omissions of counter-defendant as more specifically
       stated in the facts constitutes numerous and multiple violations of
       the FDCPA including, but not limited to, §1692e(2), §1692e(8),
       and §1692f(1), with respect to the Jacksons. As a result of
       Defendants’ violations of the FDCPA, the Jacksons are entitled to
       actual damages pursuant to 15 U.S.C. § 1692k(a)(1); statutory
       damages in an amount up to $1,000.00 pursuant to 15 U.S.C. §
       1692k(a)(2)(A); and, reasonable attorney’s fees and costs
       pursuant to 15U.S.C. § 1692k(a)(3) from Defendants.

  109. Within the last 12 months, Defendants attempted to collect
       amounts not owed under the mortgage contract. Within the last
       12months, Defendants sought unjustified amounts, which would
       include demanding any amounts not permitted under an applicable
       contract or as provided under applicable law in violation of the Act
       §1692f(1). Within the last 12 months, Defendants threatened legal
       action that was either not permitted or not actually contemplated
       in violation of the Act §1692 e. Within the last 12 months,
       Defendants communicated with third parties: revealing or
       discussing the nature of debts with third parties in violation of the
       Act §1692 c. Defendants within the last 12 months, failed to
       identify themselves and notify the Jacksons in every
       communication, that the communication was from a debt collector
       in violation of the Act §1692e(11). Within the last 12 months
       Defendants falsely stated the amount of the debt owed in violation
       of §1692e2a.

  110. Congress found it necessary to pass the FDCPA due to rampant
       abusive practices by dishonorable debt collectors. 15 USC § 1692
       is entitled "Congressional findings and declaration of purpose" and
       it states as follows: (a) There is abundant evidence of the use of
       abusive, deceptive, and unfair debt collection practices by many
       debt collectors. Abusive debt collection practices contribute to the
       number of personal bankruptcies, to marital instability, to the loss
       of jobs, and to invasions of individual privacy. (b) Existing laws
       and procedures for redressing these injuries are inadequate to

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       protect consumers. (c) Means other than misrepresentation or other
       abusive debt collection practices are available for the effective
       collection of debts. (d) Abusive debt collection practices are
       carried on to a substantial extent in interstate commerce and
       through means and instrumentalities of such commerce. Even
       where abusive debt collection practices are purely intrastate in
       character, they nevertheless directly affect interstate commerce. (e)
       It is the purpose of this title to eliminate abusive debt collection
       practices by debt collectors, to insure that those debt collectors
       who refrain from using abusive debt collection practices are not
       competitively disadvantaged, and to promote consistent State
       action to protect consumers against debt collection abuses.

  111. SLS as the servicer violated the FDCPA, 15 U.S.C. § 1692f, by
       using unfair and unconscionable means to collect the debt owed by
       the Morris, including the collecting and attempting to collect of
       interest and other charges, fees and expenses not authorized by the
       original Loan and/or Modification Agreement, or otherwise legally
       chargeable to the Jacksons as more fully set forth above. SLS
       violated the FDCPA, 15 U.S.C. § 1692e(2), by misrepresenting the
       character, amount and legal status of the Plaintiffs’ debt. For
       example the default notices contained the incorrect amount owed
       on the loan and included incorrect amount of past due payments as
       well as incorrect amounts needed to bring the loan current. SLS
       violated the FDCPA, 15 U.S.C. §§ 1692e(5)and 1692f(6), by
       threatening to foreclose on the Jacksons’ home even though it has
       no present right to possession of the property under the security
       agreement, and by threatening to take other action prohibited by
       law. SLS violated the FDCPA, 15 U.S.C. § 1692g(a)(1), by failing
       to accurately and fully state in communications to the Plaintiffs
       “the amount of the debt.”

  112. SLS by overcharging Plaintiffs’ escrow account, falsely
      represented the amount of the debt necessary to cure the deficiency
      of the escrow account in violation of 15 U.S.C. § 1692e(2)(A).
      SLS also falsely represented the character, amount, or legal status
      of the debt in violation of 15 U.S.C. § 1692e(2)(A). SLS by failing
      to report the disputed debt as disputed to credit reporting bureaus,
      communicated credit information which was known or which
      should have been known as false in violation of 15 U.S.C. §

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       1692e(8). SLS by continuing to charge late fees and interest, and
       by holding the Jacksons’ payments in a suspense account, failed to
       cease collection on a disputed debt in violation of 15 U.S.C. §
       1692g(b).

  113. As a result of SLS’s unlawful debt collections practices, the
       Jacksons have suffered and continue to suffer financial harm
       including but not limited to:
               a. Increased interest expenses on their mortgage;

               b. Improperly charged late fees on their mortgage;

               c. Damage to their credit report and credit score; and

               d. Attorney’s fees and costs associated with attempting to
               correct this dispute.

  114. The acts and omissions of Defendant as more specifically stated in
       the Facts constitutes numerous and multiple violations of the
       FDCPA including, but not limited to, §1692e(2), §1692e(8), and
       §1692f(1), with respect to Plaintiff.

  115. As a result of the violations of the FDCPA, Plaintiff is entitled to
       (1) statutory damages; (2) actual and compensatory damages; and,
       (3) reasonable attorney’s fees, costs, and expenses from
       Defendants. As a result of SLS’s violations of the FDCPA,
       Counter-Plaintiff is entitled to actual damages pursuant to 15
       U.S.C. § 1692k(a)(1); statutory damages in an amount up to
       $1,000.00 pursuant to 15 U.S.C. § 1692k(a)(2)(A);and, reasonable
       attorney’s fees and costs pursuant to 15 U.S.C. § 1692k(a)(3),
       from Defendant.

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                         COUNT FOURTEEN

                  VIOLATIONS OF THE TELEPHONE
                    CONSUMER PROTECTION ACT
                   (SPECIALIZED LOAN SERVICES)

  116. The Plaintiffs re-incorporate by reference all of the above
       paragraphs of this Complaint as though fully stated herein.

 117. The acts and omissions of Defendant as more specifically stated
      in the facts constitutes numerous and multiple violations of the
      TCPA including, but not limited to 47 USC § 227(b)(1)
      Restrictions on use of automated telephone equipment. It shall
      be unlawful for any person within the United States – (A) to
      make any call (other than a call made for emergency purposes or
      made with the prior express consent of the called party)using any
      automatic telephone dialing system or an artificial or
      prerecorded voice -(iii) to any … cellular telephone
      service…47 USC § 227(b)(1) (B) an action to recover for actual
      monetary loss from such a violation, or to receive$500 in
      damages for each such violation, whichever is greater, If the
      court finds that the defendant willfully or knowingly violated
      this subsection or the regulations prescribed under this
      subsection, the court may, in its discretion, increase the amount
      of the award to an amount equal to not more than 3 times
      ($1,500) the amount available under subparagraph (B) of this
      paragraph.

 118. The Defendants used automatic telephone dialing systems to call
      the Plaintiffs’ cell phones numerous times from June 2013 until
      December 2015. The Plaintiffs have never given the Defendant
      permission to call their cell phones with automated dialing
      systems. As a consequence of said acts, the Defendant has
      violated the TCPA and is liable for damages pursuant to federal
      law.

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                              COUNT FIFTEEN:

    VIOLATION OF THE EQUAL CREDIT OPPORTUNITY ACT

                      (SPECIALIZED LOAN SERVICES)

 119. The Plaintiff makes a claim under ECOA, which makes it illegal
      “for any creditor to discriminate against any applicant, with
      respect to any aspect of a credit transaction . . . on the basis of
      race, color, religion, national origin, sex or marital status, or age.”
      15 U.S.C. § 1691(a)(1). One way that ECOA effectuates this goal
      is through its notice requirement, which states: “Each applicant
      against whom adverse action is taken shall be entitled to a
      statement of reasons for such action from the creditor.” Id. §
      1691(d)(2). ECOA defines an “adverse action” as a: denial or
      revocation of credit, a change in the terms of an existing credit
      arrangement, or a refusal to grant credit in substantially the
      amount or on substantially the terms requested.

 120. When a creditor takes an adverse action against an applicant
      without giving the required notice, the applicant may sue for a
      violation of ECOA. § 1691e (“Any creditor who fails to comply
      with any requirement imposed under this subchapter shall be
      liable to the aggrieved applicant for any actual damages sustained
      by such applicant”); see also Thompson v. Galles Chevrolet Co.,
      807 F.2d 163, 166 (10th Cir. 1986) (quoting Sayers v. Gen.
      Motors Acceptance Corp., 522 F. Supp. 835, 840 (W.D. Mo.
      1981)).

 121. Plaintiffs contend that the Defendant’s acceleration of his debt
      constituted a “revocation of credit” for purposes of the definition
      of “adverse action.” ECOA defines “credit” to mean “the right
      granted by a creditor to a debtor to defer payment of debt or to
      incur debts and defer its payment or to purchase property or
      services and defer payment therefor.” 15 U.S.C. § 1691a(d).

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 122. On June 12, 2015, Plaintiffs received a notice from the Jauregui
      Law Firm informing them that, “due to the default under the
      terms of the mortgage or deed of trust, the entire balance is due
      and payable.” Plaintiffs made diligent efforts to determine
      whether SLS’s default notices were mere clerical errors or
      represented SLS’s termination of the loan modification
      agreement. Based on SLS’s prolonged non-responsiveness, and
      its affirmative statements regarding loan acceleration and default,
      SLS terminated the loan modification agreement and thereby
      revoked the Plaintiffs’ credit for purposes of § 1691(d)(6).

 123. When SLS informed the Plaintiffs that it had accelerated his loan
      and was commencing foreclosure proceedings, its statements
      communicated the bank’s refusal to abide by the terms of the loan
      modification agreement entered into on August 29, 2013, which
      had given Plaintiffs a longer period to repay the loan. On its face,
      this communication revoked the prior credit arrangement.
      Because the Defendants failed to send an adverse action notice,
      the Defendants took an adverse action without complying with
      ECOA’s notice requirements and have violated the terms of the
      EOCA and owe damages for said violations to the Plaintiffs.

                    COUNT SIXTEEN:
             CLAIM FOR DECLARATORY RELIEF
                   (ALL DEFENDANTS)

124.     The Jacksons re-allege and adopts the above paragraphs as if
         fully set forth herein and also asserts the following:

  125. Defendants breached the contract with the Jacksons by failing
       to follow the terms for notice requirements agreed to in the
       mortgage contract as well as payment application. Defendants
       never sent the Jacksons the required notices and failed to
       properly apply their payments. As a result the Jacksons are
       entitled to the following declaratory relief: (1) An Order
       declaring that they are not in default of their mortgage
       agreement and declaring the notice of default is null and void.

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            (2) An order declaring that Defendants have no right or
            authority to foreclose on the Jacksons’ property. (3) An Order
            prohibiting Defendants from foreclosing on the Jacksons’
            property.

PLAINTIFFS (THE JACKSONS) DEMAND A TRIAL BY JURY.

      WHEREFORE, the Plaintiffs having set forth their claims for relief
against the Defendants respectfully pray of the Court as follows:

      a.    That the Plaintiffs have and recover against the Defendants, a
            sum to be determined by this Court and their peers in the form
            of actual damages.

      b.    That the Plaintiffs have and recover against the Defendants a
            sum to be determined by this Court in the form of
            compensatory and punitive damages.

      c.    That Plaintiffs, the Jacksons, be awarded attorney fees and
            court cost.

      d.    That the Plaintiffs have such other and further and proper relief
            as the Court may deem just and proper:

                                      RESPECTFULLY SUBMITTED:

                                      /s/ Kenneth James Lay
                                      HOOD & LAY, LLC
                                      1117 22nd Street South
                                      Birmingham, Alabama 35205
                                      Tel: (205) 323-4123
                                      Fax:(205) 776-2040
                                      Attorney for Plaintiffs

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