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U.S. Bank National Association v. Nichols

United States District Court, N.D. Oklahoma

September 10, 2019

U.S. BANK NATIONAL ASSOCIATION, Plaintiff,
v.
TONNIE CHICKE NICHOLS; BORIS BERNARD NICHOLS, Defendants.

          OPINION AND ORDER

          JOHN E. DOWDELL, CHIEF JUDGE.

         Before the Court are a Notice of Removal (Doc. 2), Motion for Leave to Proceed In Forma Pauperis (Doc. 4), and an Application for Emergency Temporary Restraining Order, Preliminary Injunction, and Declaratory Relief for Wrongful Forclosure [sic]” (Doc. 5).

         This action is the latest of five cases filed in this District by Tonnie Chicke Nichols and Boris Bernard Nichols, who are defendants in the removed foreclosure proceeding. (See Nos. 18-CV-55-JED-FHM, 18-CV-656-JED-JFJ, 19-CV-40-TCK-JFJ, 19-CV-203-JED-FHM, 19-CV-482-JED-FHM). They have attempted to remove the foreclosure case multiple times, without success, and they have unsuccessfully filed claims against the foreclosing bank in an attempt to prevent foreclosure.

         Tonnie and Boris Nichols initiated the instant proceeding by filing a “Notice of Removal” of No. CJ-2017-1957 from Tulsa County District Court. (See Doc. 2 at 1). The Clerk docketed the case as a new civil pleading, apparently because the “Notice” filed by Tonnie and Boris Nichols references alleged claims against the bank. (See Id. at 7-8).[1] The Court considers their filing another attempt to remove the Tulsa County District Court action, while at the same time attempting to reassert claims in an effort to prevent foreclosure.

         The Nichols defendants' prior attempts to remove the foreclosure proceeding have been unsuccessful and were remanded due to untimeliness. United States District Judge Terence C. Kern previously remanded the same Tulsa County case after the Nichols defendants filed an earlier untimely removal of the foreclosure action. (See No. 19-CV-40-TCK-JFJ, April 4, 2019 Opinion and Order, Doc. 17; see also id., Doc. 28 [Tenth Circuit dismissal of the Nichols defendants' appeal, for lack of appellate jurisdiction]). After Judge Kern remanded the action, the Nichols defendants filed a second Notice of Removal of the Tulsa County action, in No. 19-CV-203-JED-FHM. The undersigned remanded the second removal, determining (as had Judge Kern) that the removal of the foreclosure case was untimely.

         The Nichols defendants' request for leave to file in forma pauperis (Doc. 4) is granted, but their action will be remanded for the reasons previously set forth in the prior remand orders by the undersigned and by Judge Kern. (See 19-CV-40-TCK-JFJ, Doc. 17, 28; 19-CV-203-JED-FHM, Doc. 9). In short, the Nichols defendants' Notice of Removal in this case was untimely, just as their prior attempts to remove the same Tulsa County foreclosure proceeding were untimely. They have provided no new justification for removal.

         In addition, the Nichols defendants' attempt to assert “claims” in their Notice of Removal is procedurally improper. Any such claims would, in any event, be dismissible as frivolous.[2] The gravamen of the claims they reference in their Notice of Removal is the same as before: they argue that the bank did not have standing to foreclose because it was not the original lender. (See Order dismissing claims in 18-CV-55-JED, 18-CV-656-JED, Doc. 10). Their principal argument - that they should be relieved of their mortgage under theories that (1) only credit was lent to them and (2) there was a financial crisis created by mortgage-backed securitizations - have been flatly rejected by other courts. See, e.g., Scarborough v. LaSalle Bank Nat'l Ass'n, 460 Fed.Appx. 743, 750-51 (10th Cir. 2012) (citing cases). As the court explained in Ladouceur v. Wells Fargo, 682 Fed.Appx. 649 (10th Cir. 2017):

The Ladouceurs filed the present federal court complaints against Wells Fargo claiming it lacked standing to foreclose on the two properties because it didn't own the security interests in their properties. . . . [T]he Ladouceurs allege the contracts relating to the securitization of their loans were fraudulent and the deeds of trust were not properly assigned. Consequently, they contend Wells Fargo lacks standing to foreclose on their properties. But as the district court correctly held, the Ladouceurs are not parties to the securitization assignments and have not stated any plausible claim to relief arising out of the assignment of the loan documents. “[S]ecuritization of a note does not alter the borrower's obligation to repay the loan[; it] is a separate contract, distinct from the borrower's debt obligations under the note.” Because the Ladouceurs have failed to state a plausible cause of action, we affirm the dismissal of their complaints.

682 Fed.Appx. at 649 (quoting Thompson v. Bank of Am., N.A., 773 F.3d 741, 749 (6th Cir. 2014)). The Nichols defendants' other theories have also been rejected by the courts. See, e.g., Hodge v. Ocwen Loan Serv., No. 11-CV-837-DN, 2012 WL 1434887 (D. Utah Apr. 25, 2012) (dismissing breach of contract, quiet title, declaratory and injunctive relief claims that were premised upon the securitization theory); see also Heaton v. American Brokers Conduit, 496 Fed.Appx. 873, 876 (10th Cir. 2012) (rejecting “split-note” and securitization theories); Hoverman v. CitiMortgage, Inc., 11-CV-118-DAK, 2011 WL 3421406 (D. Utah Aug. 4, 2011) (rejecting fraud / misrepresentation theory based upon securitization of a loan: “the great weight of authority from Federal District Courts around the nation . . . suggests that securitization of loans does not affect the rights of the lender or servicer of the loan to enforce its rights under the loan”).

         The Nichols defendants submitted 511 pages of “exhibits” with their Notice of Removal, and they re-filed an “Application for Emergency Temporary Restraining Order, Preliminary Injunction, and Declaratory Relief for Wrongful Disclosure” (Doc. 5), which was initially filed in state court. In the injunction Application, the Nichols defendants contend that they are likely to succeed on the merits because they received an “arbitration award” dated July 11, 2019. (See Id. at 6). They have provided a purported “Final Arbitration Award, ” issued by Sitcomm Arbitration Association in their exhibits. (See Doc. 3 at 10-37).[3] That document is a bizarre jumble of inconsistent, nonsensical word salad. (See id.).[4]

         The arbitration document purports to award the Nichols defendants a total of $800, 000, comprised of $200, 000 from each of the “respondents” to the arbitration, who are identified as (1) the plaintiff bank in this case, (2) its CEO, (3) the Attorney General of the State of Oklahoma, and (4) First Mortgage, LLC. The document does not identify any specific wrongdoing or basis for the award. Instead, the “arbitrator” announced that the Nicholses had a prior relationship with the four respondents and formed a contract by making an unspecified counteroffer or “conditional acceptance” to which the respondents somehow “tacit[ly] acquiesce[d]” by failing to respond:

On or about December 20, 2018, the Claimant [Nichols] and the Respondent(s) entered into a written self-executing, binding, irrevocable, contractual agreement coupled with interests, for the complete resolution of their misconvictions and other conflicts respecting their previous relationship. The Respondent(s) made an attempt to change the terms of that contractual agreement and the Claimant presented a counter offer or conditional acceptance of the offer to the Respondent(s). The record clearly documents that the Respondent(s) have failed to properly respond after they received the counter offer, whereby such nonresponse would equate to tacit acquiescence thereby creating an estoppel respecting the Respondent(s) and any future claims and/or prior claims and/or present claims associated with the instant matter.

(Doc. 3 at 32-33, ¶ 18).[5] While it vaguely references a previous relationship, the document does not include any facts regarding the relationship.

         The purported arbitration award is unlike any other this Court has ever seen. It is devoid of any specific fact-finding. While it references a contract dated December 20, 2018, there is no actual discussion of what its terms are, nor does it recite what the consideration or subject matter of the purported contract was, whom the specific parties to the purported contract were, whether they actually executed any document and, if so, when, and it does not address a method of service or notice, if any, that was given to any of the “Respondent(s).” The only “terms” of the “contract” that are cited are the same “terms” as those in the purported unilateral “conditional acceptance” “contract template” that Sitcomm Arbitration Association makes available on its own website. The arbitrator found that the respondents, through “tacit acquiescence” to an unspecified “counter offer” or “conditional acceptance, ” gave the Nicholses the right to enforce a ...


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