Court Opinion

ID: 6327333
Source: CourtListenerOpinion
Date Created: 2022-03-28 16:00:33.074001+00
Date Added: 2024-06-11T09:22:23.545070
License: Public Domain

USCA11 Case: 21-11806      Date Filed: 03/28/2022   Page: 1 of 9

                                           [DO NOT PUBLISH]
                            In the
         United States Court of Appeals
                 For the Eleventh Circuit

                   ____________________

                         No. 21-11806
                   Non-Argument Calendar
                   ____________________

GREGORY C. PRICE,
                                              Plaintiff-Appellant,
versus
LAKEVIEW LOAN SERVICING, LLC,

                                            Defendant-Appellee.

                   ____________________

          Appeal from the United States District Court
               for the Middle District of Florida
           D.C. Docket No. 2:19-cv-00655-JES-MRM
                   ____________________
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2                       Opinion of the Court                 21-11806

Before WILSON, JORDAN, and ANDERSON, Circuit Judges.
PER CURIAM:
       Gregory C. Price, proceeding pro se, appeals the district
court’s dismissal of his amended complaint alleging fraud, breach
of contract, and other claims related to his mortgage debt. Mr.
Price alleged that a mortgage and note provided by Lakeview Loan
Servicing, LLC, which recorded a mortgage debt owed by Mr.
Price, were fraudulent. He also alleged that Lakeview agreed to
have the debt paid off through a “credit agreement” from him,
which it allegedly accepted by failing to return the “agreement” to
him. The district court dismissed all of Mr. Price’s claims for failure
to state a claim upon which relief can be granted and it also dis-
missed the counts based on Mr. Price’s alleged “credit agreement”
as frivolous. On appeal, Mr. Price argues that the dismissal of his
claims was improper and violated his Seventh Amendment right to
a jury trial. We disagree and affirm.
                                   I
       Because we write for the parties and assume their familiarity
with the record, we set out only what is necessary to explain our
decision.
       On August 29, 2013, Mr. Price executed a promissory note
for $142,348.00 to secure a mortgage for real property located in
Englewood, Florida. The mortgage was given to Mortgage Elec-
tronic Registration Systems, Inc. (“MERS”), which recorded it with
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21-11806              Opinion of the Court                       3

the clerk of court in Charlotte County, Florida. The servicing
rights for the mortgage were subsequently assigned to Lakeview
Loan Servicing, LLC.
       Mr. Price alleges that he saw on the MERS database that his
mortgage was “given” to MERS, that this “separate[ed]” the mort-
gage and the note, and that this “bifurcation” makes both the mort-
gage and note fraudulent. After suspecting “anomalies” with the
mortgage and note, Mr. Price requested that Lakeview provide the
“QWR validity report of the mortgage and NOTE” with original
blue-ink signatures, but Lakeview never did. Because Lakeview
never provided these documents, Mr. Price claims in Count I of his
complaint that Lakeview is fraudulently attempting to collect an
unverifiable mortgage debt.
       In addition, Mr. Price alleges that he issued to Lakeview a
self-generated “credit agreement” under which his original mort-
gage debt would become void and be replaced by a one-time pay-
ment of $1,250.00, which Lakeview could pick up at Mr. Price’s
home. The credit agreement was issued by Mr. Price as a “Li-
censed, Private Banker” and was signed by “Gregory C. Price: (fa-
ther, son, holy ghost).” Mr. Price argues that he has the authority
to issue this credit agreement under the “vapor money” theory,
which goes something like this: the United States became a bank-
rupt entity when it went off the gold standard in 1933 and, because
the country then backed its currency through the value of its citi-
zens’ private property, private citizens can create new money with
their signature as creditors of the bankrupt system. Because Mr.
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4                       Opinion of the Court                  21-11806

Price left the self-generated “credit agreement” in Lakeview’s pos-
session, he alleges that Lakeview accepted the agreement as pay-
ment. His remaining claims are predicated on Lakeview’s contin-
ued efforts to collect the mortgage debt after “accepting” this credit
agreement and include breach of contract (Count II), a violation of
the Racketeer Influenced and Corrupt Organizations (RICO) Act
(Count III), “lack of jurisdiction to collect as holder in due course”
(Count IV), financial discrimination (Count V), and “other crimes”
(Count VI).
                                   II
        We review a grant of a motion to dismiss for failure to state
a viable claim de novo, accepting the factual allegations in the com-
plaint as true and construing them in the light most favorable to
the plaintiff. See Spain v. Brown & Williamson Tobacco Corp., 363
F.3d 1183, 1187 (11th Cir. 2004). Federal courts also construe pro
se litigants’ filings liberally. See Alba v. Montford, 517 F.3d 1249,
1252 (11th Cir. 2008). But “this leniency does not give a court li-
cense to serve as de facto counsel for a party, or to rewrite an oth-
erwise deficient pleading in order to sustain an action.” GJR Invs.,
Inc. v. Cnty. Of Escambia, 132 F.3d 1359, 1369 (11th Cir. 1998) (ci-
tations omitted), overruled on other grounds by Ashcroft v. Iqbal,
556 U.S. 662 (2009).
       The Federal Rules of Civil Procedure require only a short
and plain statement of the claim showing that the pleader is enti-
tled to relief. See Fed. R. Civ. P. 8(a)(2). This short and plain state-
ment must give the defendant fair notice of what the claim is and
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21-11806                Opinion of the Court                         5

the grounds upon which it rests. Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007). “A pleading that offers labels and conclusions
or a formulaic recitation of the elements of a cause of action will
not do.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation
marks omitted). To survive dismissal, a complaint must contain
enough facts to state a claim to relief that is plausible on its face.
See id. A claim is facially plausible when the court can “draw the
reasonable inference that the defendant is liable for the misconduct
alleged.” See id.
       When a plaintiff alleges fraud in federal court, Federal Rule
of Civil Procedure 9(b) requires that he allege “(1) the precise state-
ments, documents, or misrepresentations made; (2) the time,
place, and person responsible for the statement; (3) the content and
manner in which these statements misled [him]; and (4) what the
defendant[] gained by the alleged fraud.” Brooks v. Blue Cross &
Blue Shield of Fla., Inc., 116 F.3d 1364, 1380–81 (11th Cir. 1997).
Here, Mr. Price makes no such allegations. He questions the
“physical unity” of the mortgage and note and believes that Lake-
view’s copies may be “counterfeit,” but he does not allege that the
assignment to Lakeview was improper or that multiple creditors
are attempting to collect the same debt.
        Under Florida law, a mortgage and note should be read to-
gether, but they are still separate instruments. See WVMF Funding
v. Palmero, 320 So. 3d 689, 694 (Fla. 2021). The promissory note
“is the operative instrument in a mortgage loan transaction” repre-
senting the terms of payment, while the mortgage “secures” that
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6                          Opinion of the Court                      21-11806

payment in the event of default. See id. (citing HSBC Bank USA,
N.A. v. Perez, 165 So. 3d 696, 699 (Fla. 4th DCA 2015)). In other
words, the “bifurcat[ed]” nature of a note and mortgage is par for
the course and not the basis for a fraud claim.
       Moreover, Mr. Price does not explain how Lakeview’s fail-
ure to send him original, “blue-ink” versions of his mortgage and
promissory note defrauded him. Under Florida law, a party seek-
ing to enforce a negotiable instrument such as a promissory note
must produce an original copy of the instrument at trial. See Heller
v. Bank of Am., NA, 209 So. 3d 641, 644 (Fla. 2d DCA 2017). But
Mr. Price never explains how Lakeview’s failure to do so here “mis-
led” him or conveyed some benefit to Lakeview such that he was
defrauded. See Brooks, 116 F.3d at 1380. We therefore affirm the
dismissal of Count I.1
                                      III

1 Mr. Price has also filed a motion to supplement the record with material not
presented to the district court. Although we have the equitable power to do
so, we rarely supplement the record with material not before the district court.
See Schwartz v. Million Air, Inc., 341 F.3d 1220, 1225 n.4 (11th Cir. 2003). We
consider whether (1) supplementation would establish beyond any doubt the
proper resolution of the pending issue; (2) remanding for the district court to
consider the additional material would be contrary to the interests of justice
and the efficient use of judicial resources; and (3) the opposing party has ob-
jected to supplementation. See Ross v. Kemp, 785 F.2d 1467, 1475 (11th Cir.
1986). Though Lakeview has not opposed Mr. Price’s motion, we find that
supplementation would not aid the resolution of this case and would be con-
trary to the efficient use of judicial resources.
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21-11806               Opinion of the Court                         7

       We review the dismissal of a claim as frivolous for abuse of
discretion. See Bilal v. Driver, 251 F.3d 1346, 1349 (11th Cir. 2001).
A claim is frivolous if it lacks an arguable basis in law or fact. See
Bingham v. Thomas, 654 F.3d 1171, 1175 (11th Cir. 2011).
       We find no abuse of discretion in the district court’s dismis-
sal of Counts II through VI as frivolous because they are all based
on the alleged “credit agreement” Mr. Price made pursuant to the
“vapor money” theory. This theory is nonsensical and fundamen-
tally misunderstands how negotiable instruments work. Claims
founded on it are routinely dismissed by federal courts as frivolous.
See, e.g., Allah-Bey v. Roberts, 668 F. App’x 419, 420 (3d Cir. 2016)
(affirming the district court’s dismissal of the plaintiff’s complaint
where his theory was “identical to the ‘vapor money’ legal theory
that numerous federal courts have rejected as frivolous”); In re
Ward, 583 B.R. 558, 572 (Bankr. S.D. Ga. 2018) (declining to issue
a declaratory judgment based on the “vapor money” theory and
noting that “every federal court that has considered this theory has
rejected it”); Tonea v. Bank of Am., N.A., 6 F. Supp. 3d 1331, 1344
(N.D. Ga. 2014) (“Courts in this district have routinely rejected the
‘vapor money’ theory as frivolous.”); Gallant v. Deutsche Bank
Nat. Tr. Co., 766 F. Supp. 2d 714, 722 (W.D. Va. 2011) (noting that
courts have “uniformly rejected” claims based on the “vapor
money” theory); McLaughlin v. CitiMortgage, Inc., 726 F. Supp. 2d
201, 209 (D. Conn. 2010) (rejecting fraud and statutory claims based
on the “vapor money” theory). The district court did not abuse its
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8                       Opinion of the Court                 21-11806

discretion in dismissing as frivolous Mr. Price’s claims founded on
this theory.
                                  IV
        There are many other reasons to affirm the district court’s
thorough order of dismissal. For example, the district court
properly held that Count VI was improperly pled as it lumped mul-
tiple claims together in a single count. See Weiland v. Palm Beach
Cnty. Sheriff’s Office, 792 F.3d 1313, 1323 (11th Cir. 2015) (failing
to separate causes of action into different counts fails to give the
defendant “adequate notice of the claims against [it] and the
grounds upon which each claim rests” and warrants dismissal). In
addition, each of Mr. Price’s counts fails to state a claim under Rule
12(b)(6) for the reasons explained in the district court’s opinion.
        And on top of all this—though we have elected to affirm the
district court’s judgment on its merits—Mr. Price has abandoned
any challenge to the district court’s dismissal of his complaint as
frivolous or for failure to state a viable claim because he never
made any legal or factual arguments addressing the district court’s
order on appeal. Mr. Price lists critiques of the opinion in his state-
ment of issues, but his arguments discuss nothing besides the “va-
por money” theory. Issues not briefed on appeal are, of course,
deemed abandoned. See Timson v. Sampson, 518 F.3d 870, 874
(11th Cir. 2008). Because Mr. Price makes only “passing refer-
ences” to his other arguments—those that do not involve the “va-
por money” theory—and raises them in “a perfunctory manner
without supporting arguments and authority,” he has abandoned
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21-11806               Opinion of the Court                         9

them. See Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681
(11th Cir. 2014).
                                 IV
       For all these reasons, we affirm the district court’s dismissal
of Mr. Price’s complaint with prejudice.
      AFFIRMED.